ON-Lion Letter
During the hot summer months, many Wisconsin motorists are looking to the government to alleviate the distress wrought by high gas prices.  Yet, in many cases, governments themselves are contributing to the pain at the pump.
 
Wisconsin is currently one of 18 states that have "below-cost" laws that apply to motor fuel.  The state's "minimum-markup" law generally requires a markup of 9.18% on gas sold in the state, to prevent businesses from undercutting the prices of their competitors.  Yet the law actually prevents consumers from getting a good deal on gas, according to a July report by Christian Schneider of The Wisconsin Policy Research Institute (WPRI) in Thiensville, Wis.

According to Schneider's Wisconsin's Minimum Markup Law:  Mandated Pain at the Pump, Wisconsin’s minimum-markup law adds $990 million to the annual price paid by consumers, between $267 and $278 million of which is beyond what a normal profit margin would yield.  Schneider, a WPRI fellow, spent eight years working for the state legislature.

Wisconsin motorists currently pay 30.2 cents per gallon as a result of the minimum-markup law.  As a result, the report notes, minimum markup has almost eclipsed the state's 32.9-cent auto fuel tax, which is currently ninth-highest in the nation.

As the wholesale price of gas grows, moreover, so does the amount per gallon motorists have to pay as a result of minimum markup.  In January 1998, when the wholesale price of gas was 64 cents per gallon, the minimum markup stood at 5.9 cents per gallon.  In July 2008, the wholesale price of gas stands at $3.29 per gallon, with the per-gallon minimum markup amount at 30.2 cents -- an increase of 400% in 10 years.

The Lynde and Harry Bradley Foundation in Milwaukee substantially supports WPRI.
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