Capitol Update

by Senator Howard Marklein

March 18, 2022


Pain at the Pump, Rising costs and Pressure on the Pocketbook

Gas prices and inflation are impacting all of us.

Like you, I have been shocked at the gas pump and grocery store lately. Gas prices and inflation are hitting all of us hard.
It is important to understand these issues and the factors that contribute to them. We are all concerned about the future and the impact of these costs on our family budgets. Unfortunately, gas prices and inflation are primarily impacted by decisions made by our federal government.
Gas prices are set by a combination of factors including the cost of crude oil, refining costs, transportation and distribution of the gas and taxes.
The main issues affecting gas prices right now are the energy policies that have been set by the Biden administration. Since the President was elected, took office and issued several impactful Executive Orders related to energy policy, the price of gas has steadily risen. This did not start when the war in the Ukraine began. It started in late 2020.  The United States can be energy independent. We do not need to import fuel. However, the country’s current energy policies are holding us back.
The impact of the war in the Ukraine has compounded the gas price issue because world-wide supply is impacted.  But the table illustrates that the average price for a gallon of gas nationwide and across the Midwest started to increase in 2020, well before the war began. As you can see, the upward trend started in December 2020 and has continued to increase for more than a year with a spike since the war began in the Ukraine. 
As you know, there has been discussion about pausing the gas tax at both the state and federal level. However, it is important to know that the gas tax funds our road infrastructure programs throughout the United States and the State of Wisconsin. If we suspend the gas tax, the funds to pay for road maintenance, repair and construction will not exist. Road conditions are one of the top issues I hear about from constituents. We have made good progress on funding our local, rural roads and I am concerned about hindering this progress as we enter a new season of road construction in Wisconsin.
I have been told, by some constituents, that we should use the projected state surplus to back-fill the transportation fund. The key word in the previous sentence is “projected”.  The surplus we expect in Wisconsin is “projected” to exist on June 30, 2023 (more than a year from now).
Let me put it this way, farmers in Wisconsin are expected to have a pretty good year in 2022. But you don’t see a lot of them running out to buy equipment and spend money yet. They want to see how things go, if the weather is going to cooperate and how markets behave before they make all kinds of big investments.
We need to think the same way. While I am optimistic that our responsible spending plan and approach to the state budget will produce this projected surplus, I am also realistic that we will be entering our next state budget process with unique challenges brought on by tremendous inflation and federal policies that will greatly impact our state. All of the federal COVID money that is flowing into Wisconsin will be swiftly ending – and we will need to make some tough decisions. I hope you agree that we should not commit “projected” funds in an inflationary environment.
Inflation is driven by the amount of cash in our economy relative to supply.  A ton of money is chasing fewer goods.  Unfortunately, the federal government has printed (and spent) trillions of dollars – and they want to spend more! They have flooded our economy with new money and this has created inflation like we haven’t seen in a long time.
As your State Senator, my ability to directly impact gas prices and inflation is limited. However, in the most recent state budget, we focused on funding our priorities while cutting state taxes by $3.2 billion. We kept spending down and have worked diligently over the last 11 years to dig Wisconsin out of a $3 billion hole. If we hadn’t done all of this hard work over the last 11 years, we would be in a perilous position as we face tremendous inflation and rising prices!  Instead, our overall tax burden has steadily decreased and we are have a very strong fiscal condition.
I will continue to monitor these issues. Like you, I will be making adjustments in my personal spending to adapt. I know it is not easy and I understand that every resident of the 17th Senate District has to make difficult decisions in the face of rising prices.  I encourage you to reach out to our federal legislators in Congress to share your concerns and ask them to adjust our federal energy policies and stop out-of-control spending to relieve the pressure on your pocketbook.
As always, please do not hesitate to connect with me to provide input, ideas or to seek assistance.  Send an email to sen.marklein@legis.wisconsin.gov or call 608-266-0703.