Gas Tax Slush Fund Known as PECFA Serves as Piggy Bank for Pork
Summary:
The PECFA fund continues to take in money it doesn’t need.
Rather than end the fee and thus lower the price of gasoline for Wisconsin families and businesses, the Governor is proposing cutting the clean up awards by five million dollars per year and the Legislature will further consider transferring 25 million dollars from the fund to cover general state expenses.
“This is another glaring example of how there is no such thing as a temporary tax or fee,” said MacIver President Brett Healy. “Rather than finish the jobs for which these funds were intended, lower the price of gas or pay off previous borrowing, the state wants to keep siphoning more money out of the gas tanks of Wisconsin consumers.”
Background
The petroleum environmental cleanup fund awards (PECFA) program was originally established to reimburse owners for a portion of the cleanup costs of discharges from petroleum product storage tank systems and home heating oil tank systems. PECFA awards are funded from the segregated petroleum inspection fund, which receives revenue from a 2¢ per gallon petroleum inspection fee assessed on all petroleum products that enter the state, including gasoline, diesel and heating oil.
Declining Need
According to the Fiscal Bureau: While new PECFA sites continue to be identified, the number declined from an average of over 100 new sites per month during the mid-1990s, to approximately six per month currently. The monthly average of claims received by the program declined from over $15 million per month in 1997, to $4 million in 2005, to $900,000 per month currently.
Slush Fund
According to the Fiscal Bureau: Over the years, the Governor and the Legislature has used PECFA as a slush fund, transferring funds to cover general expenses and bonding to cover this shell game. The state is paying debt service costs of approximately $31 million annually for the minimum required principal and interest payments on long-term obligations and interest-only payments on short-term obligations. Under current debt payment practices, the outstanding principal balance would be approximately $185.7 million at the end of 2010-11.
The Joint Finance Committee is scheduled to debate and vote on this taxing measure today.