The editor’s opinion from Marketplace, Northeast Wisconsin’s business magazine. (Obligatory disclaimer: Most hyperlinks go to outside sites, and we’re not responsible for their content. And like fresh watermelon, peaches, pineapple, grapefruit, tomatoes and sweet corn, hyperlinks can go bad after a while.)

August 19, 2008

Gas prices and Madison

Democrats such as U.S. Rep. Steve Kagen (D–Appleton) must be breathing sighs of relief now that gas prices have slipped around 40 cents a gallon from their record highs of earlier this year. (Must be that nasty antitrust lawsuit against OPEC.)

Which does not mean that gas prices are no longer an issue for voters. That is what Randy Melchert, a Republican candidate in the 24th Assembly District in southeast Wisconsin, believes.

Melchert has a three-pronged way to reduce gas prices in the Milwaukee metropolitan area by 10 percent, and to reduce gas prices in the rest of Wisconsin as well:
  • Eliminate the state’s minimum markup law.
  • Reduce the state gas tax to the national average.
  • Eliminate the federal mandate requiring use of reformulated gas in the Milwaukee area.
Melchert’s Web site,, has an interactive calculator that shows how much money his would-be constituents would save if his plan became law. Northeast Wisconsin residents, who are not subject to the reformulated gas mandate (yet), would not save the estimated 14 cents per gallon cost of RFG, but they would still save the 24 to 36 cents per gallon the minimum markup law requires and the 4 cents per gallon above the national average at which the state gas tax is set.

The gas tax is no longer indexed to inflation, so at least it's not automatically increasing every spring. Then again, the transportation fund is decreasing thanks to Gov. James Doyle's repeated raiding of the fund to balance the state budget. The transportation fund seems to be, in the words of another observer, the payday loan store of state government.

As for Doyle’s position on the minimum markup law, he seems to emulate the death penalty dance of former Gov. Tommy Thompson. Thompson said publicly that he would sign a bill reestablishing the death penalty if it reached his desk. However, a death penalty bill never reached his desk because, despite the repeated efforts of state Sen. Alan Lasee (R–Rockland), Republican legislative leaders prevented it from coming to a vote since they didn’t support the death penalty.

Similarly, Doyle has said publicly that he would sign a bill ending the minimum markup law if it reached his desk. No such bill has reached his desk, in part due to strange votes of people like Sen. Glenn Grothman (R–West Bend), who in 2005 voted in committee against ending the law over concerns that gas stations wouldn’t be able to cover the cost of credit card transactions. It’s not clear what part of the state Constitution stipulates that legislators’ duties include monitoring gas station credit card transaction fees.

For that matter, setting (or effectively setting) gas prices is not the role of government, period. Many Republicans wrongly favor the minimum markup law on the premise that eliminating it would eliminate smaller gas stations in favor of the behemoths of Big Oil. As stated here before, evidence of predatory gas pricing is nonexistent, and as it is, consumers don't usually know or ever care about the source of their gas (with the exception of Citgo, owned by Venezuela and its vile "president," Hugo Chavez).

On the other side of the aisle, do not assume that the drop in gas prices is a success of the Democratic Party. It may well be that gas prices aren't going to drop to the levels (about $2.30 a gallon) that preceded Democratic control of Congress. It is a 100 percent guarantee that, next spring at the latest, they will increase with a President Obama and Democratic-controlled Congress, since Obama and most Democrats believe that oil companies should be saddled with windfall profits taxes and, anyway, we need to be weaned from our cars and "cheap" energy. (I'll believe that the next time I see any Democratic member of Congress on a Washington, D.C., bus.)

Then again, perhaps there's less urgency about gas prices in Madison because ... gas prices are (as of today) lower in Madison than in other metro areas of Wisconsin.

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