Are we a donor state?
This question comes up many times during discussions about increasing funding for infrastructure: Is Michigan a donor state to the federal government? Do we give more to the government in fuel taxes than we receive? According to an article published today by Mlive, the answer is complex.
As Michigan lawmakers consider ways to raise more than $1 billion a year in new transportation funding, some critics questioning the need for additional revenue have referred to Michigan as a “donor state.”
If only the federal government would give us back what we pay in, they say, Michigan residents would not face the prospect of increased state fuel taxes or vehicle registration fees to fund road repairs.
That argument is something of a non-starter, however, as the federal government is now sending more money to Michigan than it collects here at the pump…
However, there are different ways to look at the issue.
As the House Fiscal Agency also pointed out, rate of returns often are calculated by comparing each state’s share of federal funding to their share of contributions to the Highway Trust Fund. In that respect, Michigan could be considered a transportation donor state because it contributed a larger percentage than it got back, realizing a relative return rate of only 90 percent.********************************
The bottom line is this: Michigan needs more state funding for infrastructure NOW!
Contact your legislators today and remind them that it will save money and lives in the future if they find a way to increase funding for our roads and bridges today.