A Project of The Annenberg Public Policy Center

Bluegrass Gasoline Blues

Mitch McConnell's ad casts his Senate challenger as a villain behind high fuel prices, a big exaggeration.


Summary

Senate Minority Leader Mitch McConnell of Kentucky is running an ad blaming his opponent for contributing to high gasoline prices in the state. We find that’s a big exaggeration. At most, prices are 12.1 cents per gallon higher as a result of the 1980 tax change that was favored by Democratic candidate Bruce Lunsford. That’s less than 3 percent of gas prices today, and actually less than the rise in general inflation since 1980.

Analysis

In his ad titled "Gas Tax" and an accompanying Web site, Republican Sen. Mitch McConnell of Kentucky takes a page out of John McCain’s playbook, focusing blame for high fuel prices on one individual – his opponent, Bruce Lunsford.

Self-Raising Taxes

The McCain ad we wrote about on July 22 holds opponent Barack Obama responsible for "rising prices at the pump." McConnell also blames his Democratic opponent for at least part of Kentucky’s "soaring" gasoline prices. But that’s a huge stretch.

[TET ]

Mitch McConnell for U.S. Senate Ad: "Gas Tax"
 

Mitch McConnell: I’m Mitch McConnell and I approve this message.

Announcer: Gas prices are soaring and Kentucky’s gas tax just went up again. Why? Nearly 30 years ago, Bruce Lunsford lobbied for automatic gas tax increases.

Bruce Lunsford: We changed the way we tax gas in this state to give us a budget that could grow.

Announcer: The Lunsford automatic gas tax has already cost Kentuckians hundreds of millions and today, Lunsford wants to pump taxpayers for even more. Bruce Lunsford, automatic tax increases, more expensive gas. [/TET]

The ad says, "Gas prices are soaring and Kentucky’s gas tax just went up again." Why, it asks? "Nearly 30 years ago, Bruce Lunsford lobbied for automatic gas tax increases."

In fact, Lunsford can’t be blamed for more than a very small portion of the prices pictured in this ad. It’s true that as an aide to a former governor, Lunsford lobbied the state Legislature for a 1980 tax change that currently accounts for just 12.1 cents of the price paid at the pump in Kentucky. McConnell’s ad shows images of gasoline pumps displaying prices of $4.19 to $4.39 per gallon and at one point a pump showing a total cost of $65.59. Viewers could easily get the impression that Lunsford is somehow to blame for those amounts, which is nonsense. Even if Lunsford were solely responsible for the tax increase, which he isn’t, the tax rise amounts to less than 3 percent of the prices and amounts the ad pictures.

Just to put the matter into perspective, Kentucky taxes gasoline by 8.5 cents per gallon less than the average for all states, according to the American Petroleum Institute. In fact, Kentucky’s gasoline tax is still 2.8 cents per gallon lower than would have been required to just keep pace with inflation, as measured by the Consumer Price Index.

Lunsford has taken partial credit for the tax switch, and he still defends it: "We changed the way we tax gas in this state to give us a budget that could grow," Lunsford has said, in a video clip that McConnell includes in his ad. But Lunsford was not solely responsible, of course. He lobbied for state law H.B. 973 as an aide to then-Gov. John Y. Brown, a Democrat. It was passed by the state Legislature and signed into law by Brown. It replaced the state’s 9-cents-per-gallon gasoline tax with a tax based on the value of the fuel rather than the number of gallons – making it 9 percent of average wholesale price. This is called an ad valorem tax, or one that is pegged to the value of the thing being taxed.

Roberton Williams, principal research associate at the Tax Policy Center, says the ad valorem tax has eliminated the need to increase the per-gallon tax to account for inflation. More recently, says Williams, it has insulated the state government from declines in revenues used for roads and bridges and other purposes. "All the [other] states are getting killed right now because less gas is being sold and their prices are set at cents per gallon," Williams told FactCheck.org. But "for Kentucky the tax went up because the price went up, so the government isn’t in as bad a shape."

But whether the 1980 tax change was good or bad – and we take no stand either way on that – McConnell’s ad misleads voters by tagging Lunsford with responsibility for the prices pictured in the ad.

Lunsford Hits Back

[TET ]

Bruce Lunsford for U.S. Senate Ad: "Dishonest"

Announcer: Kentucky’s largest newspapers call Mitch McConnell’s attacks on Bruce Lunsford "dishonest." They say McConnell’s ad is "an insult to the people who have kept him in office for 24 years." McConnell raised 3 million dollars from Big Oil, while voting to give them billions in tax breaks. But he blames others for high gas prices, hoping voters can be fooled one more time.

Bruce Lunsford: I’m Bruce Lunsford, and I approve this message, because it’s time for a change. [/TET]

Lunsford could have said all this in his ad striking back against McConnell’s attacks. He didn’t. Instead, he chose to zero in on the amount of campaign money his opponent has taken from the oil and gas industry. The ad alleges that McConnell has "raised 3 million dollars from Big Oil, while voting to give them billions in tax breaks." But the Center for Responsive Politics only shows donations of $650,000 to McConnell from the oil and gas industry over his entire political career.

Whence the 2.4 million dollar discrepancy? The Louisville Courier-Journal reports that the Lunsford campaign was counting money donated to the National Republican Senatorial Committee while McConnell was its chair. Is that fair? It’s true that a party committee chairman’s success is judged in large part by how much money is contributed to the committee under his leadership, though he personally doesn’t solicit every contribution. That chairman might or might not be as grateful for a donation to the committee as for a donation to his own campaign reelection fund.

— by Jess Henig

Sources

Interview with Roberton Williams, principal research associate at the Tax Policy Center, 29 Jul 2008.

 

 

Kentucky General Assembly. "Chapter 218 (H.B. 973)." 3 Apr 1980.

American Petroleum Institute. "State Motor Fuel Excise Tax Rates." Jul 2008.

Kentucky Department of Revenue. "Motor Fuel Tax Rate History." Accessed 30 Jul 2008.

OpenSecrets.org. "Mitch McConnell: Industry Data." Center for Responsive Politics. Accessed 30 Jul 2008.

Gerth, Joseph. "Lunsford Ad Targets McConnell’s Oil Votes." Louisville Courier-Journal. 26 Jul 2008.