WISCREPORT.COM (10/4/07) - The Wisconsin Petroleum Council says the proposed tiered oil tax creates more unintended consequences for Wisconsin’s transportation funding needs then proponents would leave Wisconsin motorists to believe. The Council says the increase will likely be seen in consumer prices because provisions may be against the U.S. Constitution, and, the council warns that no law demands that oil companies deliver oil products to every state.

“Proponents of this tax continually have tried to convince the public and legislators that it won’t be passed on at the pump”, Erin Roth, Executive Director stated. “The reality is, 82% of Wisconsites polled in a Wood Communications poll, don’t believe what they are being told by supporters of this ill advised tax proposal," Roth says.

The oil tax proposal is part of the on-going budget debate going on in Madison. The proposal creates a tiered tax system that would have smaller petroleum distributors paying less of the tax, while major oil companies would pay 3% of gross receipts of their sales of petroleum products in Wisconsin.

Included in the Governor’s, and Senate Democrat’s budget, is a provision that would prohibit oil companies from passing the tax on to consumers. Oil company executives could be incarcerated if the state were to prove they were attempting to pass on the tax to the Wisconsin consumers at the pump.

“Contrary to what many supporters are telling the legislature, media and the public, this experiment does not exist in any other state”, Roth reiterated. “It was tried in the 1980’s by New York and Connecticut but was litigated and thrown out by the courts.”

Three reputable Wisconsin law firms, including the firm employing the former Wisconsin Attorney General, have issued opinions stating they believe the oil tax to be a violation of the U.S. Constitution under the Commerce Clause.

“Even the State’s own Legislative Counsel agrees that if litigated, courts here may follow the findings of the New York case”, Roth argued.

“If litigated and oil companies win, the state might be ordered to pay back hundreds of millions of dollars, plus interest, to the oil companies. Who wins then, certainly not Wisconsin gasoline consumers,” Roth asserts.

Many petroleum industry analysts, including the Oil Pricing Information Service, have stated that if this proposal passes in Wisconsin, it could adversely affect gasoline supplies to the state.

Wisconsin Petroleum Council Executive Director Roth suggests that oil companies may ship their petroleum elsewhere, instead of making it available to Wisconsin consumers, should the Wisconsin tax proposal be enacted.

“Unlike regulated utilities, the petroleum industry is not required to ship gasoline and diesel fuel to the state” Roth said.

“Major oil companies would be forced to decide whether to pay the 5 to 7 cent penalty to do business in Wisconsin, or choose to send the product to other states like Minnesota, Illinois or, even the country of Canada where we ship product, where there is no similar punitive tax," Roth says. "What would you do if you are the CEO of a major oil company?” Roth questioned.

“This proposal just won’t work irregardless of what Governor Doyle; Senate Democrats and Big Road interests want the public to believe,” Roth stated.

“We all know that there are numerous transportation and transit needs in the state, so let’s work together to find a better way to fund transportation needs,” Roth said.