Michigan Senate Approves Gas Tax Hike For Long-Term Road Funding
Mlive, November 13, 2014
LANSING, MI — The Michigan Senate on Thursday approved a long-term plan designed to raise more than $1 billion a year in new revenue for the state’s crumbling roads.
The upper chamber, in a 23-14 vote, jump started fuel tax legislation that had stalled in June, sending the measure to the House for further consideration.
Gov. Rick Snyder has called a comprehensive road funding plan his top priority for the so-called lame duck session. With only nine scheduled session days remaining this year, all eyes now turn to the lower chamber.
“We’re not celebrating until the governor signs something,” Senate Majority Leader Randy Richardville, R-Monroe, said after the Thursday’s vote. “It’s the right thing to do. It’s about time we fix these roads.”
The plan would convert the state’s 19-cent per gallon gas tax to a wholesale version and gradually increase rates over four years. At the current wholesale price, gas taxes could top 40 cents by 2018.
Other bills approved Thursday would increase traffic fines for overweight or oversized vehicles and require the state to solicit bids from local road commissions for construction projects in their jurisdiction.
Snyder, in a statement released after the Senate session, praised the legislative accomplishment and urged similar action in the House, which is not scheduled to meet again until early December.
“We’ve heard from people across our state. Michigan needs to invest in modern, well-maintained roads to keep our state moving forward,” Snyder said. “The snow falling across our state this week is a reminder of the struggles of last year’s pothole season and the aging bridges crossed by thousands of residents every day.”
Half of the Majority Republican caucus — 13 members — voted for the fuel tax bill in the Senate, joining 10 of 12 Democrats.
Related: How they voted: Fuel tax hike for Michigan road repairs passes state Senate
Minority Leader Gretchen Whitmer acknowledged that higher fuel taxes could be tough on some residents but supported the proposal, anticipating that the House will also take up a Homestead Property Tax increase the Senate approved in June.
“There is a cost to every decision that we make,” said Whitmer, D-East Lansing. “I think the biggest cost would be to continue to try to push it off and not take action.”
The Senate had initially refused to even adopt a substitute version of the bill, preventing a vote on the legislation itself. Some Democrats sat out that first vote but ended up backing the fuel tax proposal upon reconsideration.
Richardville attributed the change to a conversation he had earlier in the day with Detroit Mayor Mike Duggan and a subsequent amendment to different bill.
“He wanted to have a little more flexibility with the mass transit funding,” Richardville said. “So we looked to see if we could let them take only Detroit dollars — so if more dollars are generated for the City of Detroit — then they could put more money into mass transit.”
Earlier Thursday, the Senate rejected a joint resolution that would have asked voters to consider a 1-cent increase in the state sales tax. That plan, which would have required a supermajority but fell short in a 18-19 vote, was also projected to raise more than $1 billion a year.
Sen. Bruce Caswell, R-Hillsdale, spoke in support of the sales tax option, pointing out that fuel tax revenue is projected to decline as fuel efficiency increases.
“If we go the sales tax route, we will have a built in percentage increase each year,” he said. “As the price of gas goes up, the amount of money raised will go up, which will counteract the increased costs of construction.”
Sen. Patrick Colbeck, R-Canton, said any tax increase would slow down Michigan’s economic comeback and suggested the Legislature should have spent more time trying to find budget savings.
“Tax increases should always be the last solution considered,” he said. “Instead, what happens too often here in Lansing — and frankly Washington D.C. as well — is that tax increases are the first solution.”
The sales tax idea is not completely off the table, according to Richardville. If the fuel tax proposal makes it through the House, lawmakers could still send a sales tax proposal to the ballot and allow voters to choose which road funding mechanism they prefer.
Correction: This article originally indicated Michigan’s current gas tax is 17 cents per gallon. It is actually 19 cents.
Jonathan Oosting is a Capitol reporter for MLive Media Group. Email him, find him on Facebook or follow him on Twitter.
