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Michigan bills would increase diesel tax 12 cents, gas tax 8 cents

The cost to fuel up in Michigan soon could be on the rise. A proposal in the Michigan House would increase the state’s tax on diesel by 12 cents and the tax on gas by 8 cents in an effort to preserve federal highway funds.

Reps. Pam Byrnes, D-Lyndon, and Dick Ball, R-Bennington, have introduced a legislative package that would initially boost the per gallon tax on diesel from 15 cents to 21 cents. Starting in Jan. 2013, the tax on diesel would increase to 27 cents per gallon.

The gas tax would jump from 19 cents to 23 cents this year, and then to 27 cents in 2013.

It is estimated the tax increases would generate $240 million annually at the start and $480 million annually when fully implemented.

The money would be routed into a new Transportation Investment Fund. The fund would direct revenue to be used on state roads, bridges and public transportation. Tax revenue could not be diverted to other budgets.

Supporters are pushing the increases to avoid the loss of more than $2 billion in federal aid for state and local roads during the next five years. They are concerned the state doesn’t have enough of its own money to spend on projects to secure matching federal funds.

Byrnes, chairman of the House Transportation Committee, said the funding is also necessary to help attract business and create jobs.

“Businesses won’t come to a state where the roads are falling apart and bridges are crumbling. We need a stable source of revenue to invest in modernizing Michigan’s transportation system,” Byrnes said in a statement.

As far as the trucking industry is concerned, owner-operator and OOIDA Life Member John Mordus of Shelby Township, MI, isn’t too sure business wants anything to do with Michigan, regardless.

“It’s getting to the point that a lot of people won’t even come up here anymore. Number one: It costs too damn much to do business. Number two: There’s no guarantee they’re going to get a load out of here,” Mordus told Land Line.

Mordus said he believes lawmakers are resigned to the fact that increasing taxes is the thing to do. While interstate trucking operations will have the option to fuel up in neighboring states, Mordus said in-state operations and motorists would have very limited options.

“We’re headed down the wrong path here. Michigan is going to be one of the poorest states in the country with one of the highest costs of living.”

The bills – HB5768, HB5769 and HB5770 – are in the House Transportation Committee.

To view other legislative activities of interest for Michigan, click here .

Editor’s Note: Please share your thoughts with us about the legislation included in this story. Comments may be sent to [email protected] .

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