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As gas prices rise, Doyle proposes tax on imported oil
Critics say it could spark rise at the pump if companies refuse to supply to Wisconsin
McLean Bennett
Issue date: 4/19/07 Section: Campus News
After earning record profits last year, oil companies are now the target of a new tax proposed by Gov. Jim Doyle in the upcoming 2007-2009 state budget.
Doyle's proposal would impose a 2.5 percent tax on oil imported into the state. Proponents say the tax will bring in revenue for road construction and repair, but others argue that the tax could have negative impacts on consumers.
"(The tax) would be paid by the oil companies," said Carrie Lynch, spokeswoman for state Sen. Russ Decker, D-Weston. "It's not a tax that you would pay at the pump per gallon."
Lynch added the money brought in through the taxes would go toward road construction and repair.
"They're making record profits," Lynch said of the oil companies. "They're charging us billions more than it costs to produce their product."
Gas in Eau Claire is currently priced at $2.90 per gallon, according to www.fuelgaugereport.com, an increase of more than 50 cents since winter.
But state Rep. Scott Suder, R-Abbotsford, said the tax could have some negative consequences.
The tax, he said, would target not only big oil companies, but ethanol fuel producers, smaller Wisconsin-based oil suppliers, "mom and pop" service stations and Wisconsin's only oil refinery.
"It will have an adverse impact," Suder said, saying that some suppliers have said they would refuse to supply oil to Wisconsin should the tax gain approval. He added other suppliers may raise their prices.
Proponents of the tax expressed doubt that oil companies would actually refuse to supply Wisconsin.
"They sell billions of dollars worth of gasoline here in Wisconsin," said Jay Wadd, chief of staff for state Sen. Dave Hansen, D-Green Bay. "I don't think that what the governor is asking is too much to ask."
According to Exxon-Mobile's 2006 financial review, the company earned a record $39.5 billion last year. British Petroleum, Chevron, Royal Dutch Shell, ConocoPhillips and ExxonMobile earned a combined $113.3 billion in 2006, according to a press release from Doyle's office.
Erin Roth, executive director for the Wisconsin Petroleum Council, warned that the proposed tax may not even be legal, and said litigation may follow if the tax is approved.
"If it's challenged in courts," Roth said, "(I believe) it'll be found unconstitutional."
Lynch said the Joint Finance Committee is currently reviewing the proposed budget. After review, she said, the budget will make its way to the state Senate and then to the Assembly. From there, the budget will go to Gov. Doyle for signature.
Gov. Doyle's office did not return calls seeking comment.
Doyle's proposal would impose a 2.5 percent tax on oil imported into the state. Proponents say the tax will bring in revenue for road construction and repair, but others argue that the tax could have negative impacts on consumers.
"(The tax) would be paid by the oil companies," said Carrie Lynch, spokeswoman for state Sen. Russ Decker, D-Weston. "It's not a tax that you would pay at the pump per gallon."
Lynch added the money brought in through the taxes would go toward road construction and repair.
"They're making record profits," Lynch said of the oil companies. "They're charging us billions more than it costs to produce their product."
Gas in Eau Claire is currently priced at $2.90 per gallon, according to www.fuelgaugereport.com, an increase of more than 50 cents since winter.
But state Rep. Scott Suder, R-Abbotsford, said the tax could have some negative consequences.
The tax, he said, would target not only big oil companies, but ethanol fuel producers, smaller Wisconsin-based oil suppliers, "mom and pop" service stations and Wisconsin's only oil refinery.
"It will have an adverse impact," Suder said, saying that some suppliers have said they would refuse to supply oil to Wisconsin should the tax gain approval. He added other suppliers may raise their prices.
Proponents of the tax expressed doubt that oil companies would actually refuse to supply Wisconsin.
"They sell billions of dollars worth of gasoline here in Wisconsin," said Jay Wadd, chief of staff for state Sen. Dave Hansen, D-Green Bay. "I don't think that what the governor is asking is too much to ask."
According to Exxon-Mobile's 2006 financial review, the company earned a record $39.5 billion last year. British Petroleum, Chevron, Royal Dutch Shell, ConocoPhillips and ExxonMobile earned a combined $113.3 billion in 2006, according to a press release from Doyle's office.
Erin Roth, executive director for the Wisconsin Petroleum Council, warned that the proposed tax may not even be legal, and said litigation may follow if the tax is approved.
"If it's challenged in courts," Roth said, "(I believe) it'll be found unconstitutional."
Lynch said the Joint Finance Committee is currently reviewing the proposed budget. After review, she said, the budget will make its way to the state Senate and then to the Assembly. From there, the budget will go to Gov. Doyle for signature.
Gov. Doyle's office did not return calls seeking comment.
Viewing Comments 1 - 1 of 1
TD
posted 10/11/07 @ 11:40 AM CST
Someone needs to remind Mr. Wadd that while Oil Companies sell billions of dollars of gasoline in this state, that means that Wisconsin citizens BUY billions of dollars of gas here. (Continued…)
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