Our run the state like a business Governor wants to raise a tax. I thought Republicans cut taxes.
Commuting | Snyder offers new gas tax plan for road fixes | The Detroit News
Snyder offers new gas tax plan for road fixes
Karen Bouffard/ Detroit News Lansing Bureau
Lansing— Michigan would fundamentally alter the way it raises money to pay for repairs to the state's roads and bridges under a sweeping proposal expected to be unveiled today by Gov. Rick Snyder.
He's expected to suggest getting rid of the 19-cent gas tax motorists pay at the pump in favor of a tax on the wholesale price of fuel — a move expected to bring in more funds to fix roads and bridges as inflation pushes up the price of gasoline and diesel fuel.
Also as part of his plan, the governor will ask the Legislature to allow counties and regional authorities to levy a vehicle registration fee to raise money for local road projects, sources close to the governor confirmed. The local levy would have to be approved by voters.
The two proposals are expected to be part of Snyder's Special Message to the Legislature on Infrastructure at 3 p.m. at Lawrence Technological University in Southfield. The plan will lay out Snyder's vision for improving roads and bridges, regional transit, water and sewer lines and Internet access.
Michigan's road funds have declined as consumers have cut back on purchases as gasoline prices spike as high as $4 a gallon. A wholesale tax would allow revenues to rise or fall with changing fuel prices instead of tying gas tax revenue to consumption.
Michiganians would still have to pay an 18-cent federal tax and a 6 percent Michigan sales tax on every gallon purchased.
"We're encouraged by the creativity of it," Mike Nystrom, executive vice president of the Michigan Infrastructure and Transportation Association, said of the wholesale gas tax idea. "It's a new concept that hasn't been used much nationally."
A trade group for the oil and natural gas industry wasn't very supportive, saying the change would increase the difference in gas prices between Michigan and Ohio, which doesn't have a sales tax on gas.
John Griffin, executive director of Associated Petroleum Industries of Michigan, said adding to uncertainty is the fact the wholesale price of gas changes every day.
"If the price goes up, then the tax goes up, and consumers get hit twice," he said.
Michigan spends roughly $3 billion annually on roads, and a study released in September by House Republicans concluded the state needs to invest an extra $1.4 billion annually, rising to $2.6 billion per year by 2023, to meet the minimum long-term costs to maintain its roads.
Nystrom said most states have a gas tax similar to Michigan's. Wisconsin has a 1.5 percent wholesale gas tax coupled with a per-gallon tax. Michiganians pay three taxes on gas: state gas and sales tax and a federal gas tax.
Former Gov. Jennifer Granholm, a Democrat, proposed a tax on the wholesale price of fuel, but the Legislature was cool to the idea. Snyder, a Republican, might have a similar difficult time trying to get his plan through a Republican-dominated Legislature that is opposed to new taxes.
Ari Adler, spokesman for House Speaker Jase Bolger, R-Marshall, said the Legislature will review a wholesale tax "with open minds, but we do have concerns."
Bolger would rather review how money already raised by the gas tax can be put toward roads "before we increase the tax burden on Michigan's residents and job providers," Adler added.
Lawmakers would have to approve legislation switching the taxes and setting the upper and lower limits for tax revenue under a wholesale tax. Limits would be put in place so sudden spikes or drops in fuel prices wouldn't drastically change pump prices.
Michigan has been steadily raising less money each year for roads as motorists drive less or switch to electric or more fuel-efficient vehicles.
It's growing ever closer to not having enough state road dollars to bring in all the federal transportation dollars it's owed. The state also could give up around $400 million in federal road funds next year if revenues fall short. The state gasoline tax was last raised in 1997.
Nystrom's group supports Snyder's idea of allowing counties and regional authorities to levy vehicle registration taxes.
"We're thrilled that there's finally talk of more local options," he said. "In these tighter economic times where revenue sharing cuts continue to be debated, fewer local agencies are using their general fund dollars to invest in infrastructure."
[email protected]
(517) 371-3660
Detroit News Staff Writer Frank Donnelly and the Associated Press contributed.
Commuting | Snyder offers new gas tax plan for road fixes | The Detroit News
Snyder offers new gas tax plan for road fixes
Karen Bouffard/ Detroit News Lansing Bureau
Lansing— Michigan would fundamentally alter the way it raises money to pay for repairs to the state's roads and bridges under a sweeping proposal expected to be unveiled today by Gov. Rick Snyder.
He's expected to suggest getting rid of the 19-cent gas tax motorists pay at the pump in favor of a tax on the wholesale price of fuel — a move expected to bring in more funds to fix roads and bridges as inflation pushes up the price of gasoline and diesel fuel.
Also as part of his plan, the governor will ask the Legislature to allow counties and regional authorities to levy a vehicle registration fee to raise money for local road projects, sources close to the governor confirmed. The local levy would have to be approved by voters.
The two proposals are expected to be part of Snyder's Special Message to the Legislature on Infrastructure at 3 p.m. at Lawrence Technological University in Southfield. The plan will lay out Snyder's vision for improving roads and bridges, regional transit, water and sewer lines and Internet access.
Michigan's road funds have declined as consumers have cut back on purchases as gasoline prices spike as high as $4 a gallon. A wholesale tax would allow revenues to rise or fall with changing fuel prices instead of tying gas tax revenue to consumption.
Michiganians would still have to pay an 18-cent federal tax and a 6 percent Michigan sales tax on every gallon purchased.
"We're encouraged by the creativity of it," Mike Nystrom, executive vice president of the Michigan Infrastructure and Transportation Association, said of the wholesale gas tax idea. "It's a new concept that hasn't been used much nationally."
A trade group for the oil and natural gas industry wasn't very supportive, saying the change would increase the difference in gas prices between Michigan and Ohio, which doesn't have a sales tax on gas.
John Griffin, executive director of Associated Petroleum Industries of Michigan, said adding to uncertainty is the fact the wholesale price of gas changes every day.
"If the price goes up, then the tax goes up, and consumers get hit twice," he said.
Michigan spends roughly $3 billion annually on roads, and a study released in September by House Republicans concluded the state needs to invest an extra $1.4 billion annually, rising to $2.6 billion per year by 2023, to meet the minimum long-term costs to maintain its roads.
Nystrom said most states have a gas tax similar to Michigan's. Wisconsin has a 1.5 percent wholesale gas tax coupled with a per-gallon tax. Michiganians pay three taxes on gas: state gas and sales tax and a federal gas tax.
Former Gov. Jennifer Granholm, a Democrat, proposed a tax on the wholesale price of fuel, but the Legislature was cool to the idea. Snyder, a Republican, might have a similar difficult time trying to get his plan through a Republican-dominated Legislature that is opposed to new taxes.
Ari Adler, spokesman for House Speaker Jase Bolger, R-Marshall, said the Legislature will review a wholesale tax "with open minds, but we do have concerns."
Bolger would rather review how money already raised by the gas tax can be put toward roads "before we increase the tax burden on Michigan's residents and job providers," Adler added.
Lawmakers would have to approve legislation switching the taxes and setting the upper and lower limits for tax revenue under a wholesale tax. Limits would be put in place so sudden spikes or drops in fuel prices wouldn't drastically change pump prices.
Michigan has been steadily raising less money each year for roads as motorists drive less or switch to electric or more fuel-efficient vehicles.
It's growing ever closer to not having enough state road dollars to bring in all the federal transportation dollars it's owed. The state also could give up around $400 million in federal road funds next year if revenues fall short. The state gasoline tax was last raised in 1997.
Nystrom's group supports Snyder's idea of allowing counties and regional authorities to levy vehicle registration taxes.
"We're thrilled that there's finally talk of more local options," he said. "In these tighter economic times where revenue sharing cuts continue to be debated, fewer local agencies are using their general fund dollars to invest in infrastructure."
[email protected]
(517) 371-3660
Detroit News Staff Writer Frank Donnelly and the Associated Press contributed.
