by Bruce Walker
Although Gov. Gretchen Whitmer’s 45-cent per gallon fuel tax increase has proven a nonstarter on both sides of Lansing’s legislative aisle, some of her departmental appointments still believe it a viable option.
Among them is Michigan Department of Transportation (MDOT) Director Paul Ajegba, who is on record expressing his support for Whitmer’s hike that would have positioned Michigan’s fuel taxes as the highest in the nation.
According to a news story appearing earlier this month in the Michigan State University newspaper, The State News, Ajegba stated Michigan could only fix the state’s roads if the tax was raised 80 cents per gallon. Although the story quoted Ajegba as saying the increase was “unrealistic,” the article drew the ire of MDOT officials.
Jeff Cranson, MDOT director of communications, took exception to the State News characterization of Ajegba’s comments. In an email to The Center Square, Cranson said: “The director’s quotes in the Oct. 2 State News story are dramatically out of context.”
Referencing Ajegba, Cranson said: “He was answering questions about the Act 51 formula, the distribution of road funds in Michigan which provides 39 percent to counties, 39 percent to state trunklines and 22 percent to cities and villages.” Cranson explained that trunklines refers to roadways that are designated interstates, U.S. highways and Michigan routes.
“[Ajegba] explained that the governor’s Fixing Michigan Roads Fund proposal, instead of following the Act 51 formula, would distribute more money to the high-level system, the roads in the state that carry the most commercial and commuter traffic,” Cranson said.
“The director explained that MDOT and some local road agencies have asset management plans that provide sound data about financial needs for roads while some local agencies do not,” Cranson said, adding Ajegba’s “reference to 80 cents was speculation about what the total need could be if all local agencies quantified their conditions. He did NOT contradict the governor and agrees that 45 cents, phased in over 18 months as proposed, would restore much of the state trunkline pavement to much better condition within nine years.”
The 45-cent per gallon fuel tax increase, however, was rejected during the contentious budget standoff between the Democratic governor and Republican legislators. Many Democrats in the state House and Senate also expressed their disagreement with Whitmer’s proposal.
One of the more than 140 line-item vetoes Whitmer made to the 2020 budget presented her by Republican lawmakers was a $375 million appropriation for mending the state’s roads and bridges. Her proposed fuel tax increase was estimated to add more than $2.5 billion to the state’s coffers over the next seven years.
A motorist who drives 12,000 miles a year and gets about 20 miles per gallon would pay an additional $270 a year in taxes if the 45-cent per gallon gas tax hike were approved.
James Hohman, director of fiscal policy at the Mackinac Center for Public Policy, called Whitmer’s call for a fuel tax increase a “shell game” in a Detroit News editorial.
“The governor’s budget proposes a 45-cent per gallon fuel tax to be phased in over time. State officials expect this to raise $1.26 billion in fiscal year 2020. Only $764 million of this, however, will go toward fixing the roads,” he wrote.
“Taxpayers should believe state officials when they say that they need more money to keep the roads from deteriorating,” Hohman said. “But they should also know that the proposed tax increase isn’t just about funding roads – it’s also being used as a means to fund other priorities, and these come at the cost of dedicating money for infrastructure.”
Rep. Shane Hernandez, R-Port Huron, chair of the House Appropriations Committee, specifically addressed Ajegba’s comments in a statement released late Friday afternoon. “First Gov. Whitmer laughed at the idea of a 20-cent per gallon gas tax hike. Then she proposed a 45-cent gas tax hike. Later she cut hundreds of millions of road dollars out of the budget because it didn’t come from a tax hike. And now the secret is out that her administration actually wants a ridiculous 80-cent per gallon gas tax hike,” he said.
“Michigan families are not a bottomless pit of money, and they simply cannot afford to have their monthly budgets toyed with by out of touch bureaucrats who cannot make up their mind and who are unwilling to listen to other ideas,” he continued.
“Gov. Whitmer needs to actually listen to what the people of Michigan are telling her about her reckless, nation-high gas tax and come to grips with reality,” Hernandez said.
“This isn’t going to happen, because the people of Michigan don’t want it and cannot afford it. We need her to start respecting Michigan’s hard-working taxpayers and either propose something realistic or jump on board with leaders who will. House Republicans recently passed a budget that increased funding for critical road and bridge repair work to all-time record highs without raising taxes one cent. It can be done, and we proved it,” he said.
“I’ve been saying since the very beginning that no tax increase would ever be enough. The day you pass a 45-cent gas tax increase is the day they’ll come back and say they want more. At least they are hopefully being honest with us now about how much they want from the taxpayers with this 80-cent gas tax proposal,” Hernandez said.
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Bruce Walker is a regional editor at The Center Square. He previously worked as editor at the Mackinac Center for Public Policy’s MichiganScience magazine and The Heartland Institute’s InfoTech & Telecom News.