State road plan raises gas tax, vehicle fee
LANSING (AP) – Republicans on Wednesday proposed a two-pronged approach to raising an extra $1.6 billion a year to patch up Michigan’s ailing roads, with voters possibly getting to pick an alternative if they oppose the mix of higher gasoline taxes and vehicle registration fees under consideration.
No consensus is emerging yet on how – or if – lawmakers will agree to pump more into transportation funding as called for by Gov. Rick Snyder. But a six-measure package introduced in the Senate is a starting point and includes details that weren’t in the Republican governor’s State of the State address two weeks ago.
The legislation would replace the state tax on fuels paid at the pump with a levy at the wholesale level passed along to motorists.
The gasoline tax would nearly double, from 19 cents a gallon to an equivalent wholesale tax of 37 cents per gallon, which could rise or fall no more than one penny each year, up to a ceiling of 50 cents. The per-gallon diesel tax would more than double from 15 cents to the equivalent of 37 cents a gallon, said Sen. Roger Kahn, a Saginaw Republican.
Registration fees for cars and pickup trucks, which vary because they’re based on vehicles’ value but average $100 a year, would rise 80 percent. Commercial trucks and tractors would pay 45 percent more.
“It’s certainly not soup yet. It’s just the beginning of the process,” Kahn said, anticipating joint hearings with the House.
Also introduced Wednesday was a constitutional amendment to raise the 6 percent sales tax to 8 percent and use most of the extra money for roads and bridges – coupled with eliminating state fuel taxes altogether.
“They could be married together,” Kahn said of the two plans. “You could pass the one and if (voters) don’t pass the sales tax, then (higher fuel taxes and fees) would stay in place.”
If legislators agree to put a proposal before voters, the election may be held in May because Senate leaders want to act before the summer construction season.
“Let’s not drag it out because it’s been dragged out over a couple decades already,” said Senate Majority Leader Randy Richardville, a Monroe Republican.
If the sales tax idea gains momentum, lawmakers would have until early March to put it on the statewide ballot. It would need two-thirds support from both the GOP-controlled House and Senate.
House Speaker Jase Bolger told The Associated Press Wednesday that a number of road-funding plans are being discussed and he’s not getting behind one in particular until legislators make sure money for roads can’t be squeezed from elsewhere in the state budget. Of the ballot measure, the Marshall Republican said: “I’m not rejecting anything, but that’s not where I start. I think the voters have elected us to solve problems and I think they are counting on us to solve problems.”
The Senate plan doesn’t include Snyder’s suggestion to let local governments increase motor vehicle registration fees even further to raise money for fixing local roads, though it could appear later. The switch to a wholesale tax and higher registration fees – or “user fees” – are consistent with what Snyder wants.
State Transportation Department spokesman Jeff Cranson said the governor also is open to the sales tax route.
“He just wants to fill the gap. He thinks there’s a major need in filling a gap in the way our transportation system is funded right now and wants to see it fixed,” Cranson said.
A bipartisan legislative report last year said the state needs to spend an extra $1.5 billion a year to adequately maintain the transportation system. As vehicles become more efficient, people are buying less gas – a problem because the per-gallon gas tax has not gone up in 15 years.
Snyder and lawmakers last year took $119 million from the general fund to ensure Michigan got all the federal transportation dollars for which it was eligible.