Michigan’s Gas Tax Hike of 45 Cents Likely Dead, Democrat Says, While Critics Point Out 24 Percent of New Revenue Would Not Support Roads


Gov. Gretchen Whitmer’s 45-cent fuel tax is likely out of gas, House Democratic Leader Christine Greig said, even as some attack Democrats’ statements that all of the $2.5 billion generated would be spent on roads.

Greig (Farmington Hills) belittled Republican negotiators for having “ridiculous ideas” like bonds for teacher pension obligations, according to Michigan Live. The GOP wants to split the budget and roads into two topics but accuses Whitmer of stopping work on the budget over the fuel tax idea.

Greig said a variety of options need to be on the table to get to the $2.5 billion per year Whitmer and other experts say is needed to adequately address road funding issues in Michigan.

The 45-cent gas tax hike would represent a whopping 171 percent increase, reported WBCK. The tax would shoot up from 26.3 cents per gallon to 71.3 cents per gallon.

And, $2.5 billion would pay for a lot of road work, one would think.

But will all of it go to roads?

Not according to a story by Michigan Capital Confidential.

Whitmer’s executive budget recommendation for the fiscal year that begins Oct. 1, 2019, assumes that extra revenue will flow in from her proposed 45-cent per gallon gas tax increase. This would come in three 15-cent installments, the last in October 2020, and is expected to collect $2.5 billion more from motorists annually.

But the budget recommendation only proposes spending an additional $1.9 billion on roads, not $2.5 billion. Meaning that $600 million – or 24 percent of the additional gas tax revenue – will be used to support other forms of state spending, and not, in the governor’s campaign slogan, “fixing the damn roads.”

Making it worse, not all of the 26 cents per gallon goes to roads, according to a fact sheet the Michigan Department of Transportation produced. (MDOT’s 21 cents number differs from WBCK’s 26.3 cents and is based on an average price of $3.89 per gallon.)

MDOT tries to argue the gas tax really is one of the lowest in the nation, not one of the highest already. Its excuse is that the gas tax is really 18.7 cents per gallon, which goes to roads. Meanwhile, drivers pay a 6 percent sales tax, making for 21 cents per gallon.

MDOT says:

Trouble is, the sales tax charged for gasoline doesn’t go to roads; except for a small percentage that supports transit, the sales tax on gas actually funds schools and local government.

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Jason M. Reynolds has more than 20 years’ experience as a journalist at outlets of all sizes.
Background Photo “Michigan Capital” by Subterranean. CC BY-SA 3.0.







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