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Gov. Snyder Wants Wholesale Tax On Fuel

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LANSING (WWJ/AP) – Governor Rick Snyder this week will unveil his road map for making Michigan’s roads better. This follows a new report this week that showed the state’s infrastructure is failing.

WWJ Newsradio 950 spoke with Ron Brenke, executive director of the American Society of Civil Engineers, which did the study. He thinks drivers are willing to open their wallets for better roads.

“It’s been since 1997 when the gas tax increased, and that was only a very small four cent increase,” said Brenke.

“But I think motorists want to drive on smooth roads. I think they want to have an efficient system that gets you the places you want to go in a timely matter. And I think motorists are willing to pay a little bit more for that,” he said.

Brenke said the decision to delay the repair of roads of bridges across Michigan costs families more than $1,000 per year.

“The report highlights the loss of productivity by the industry. It makes us less competitive, both statewide and nationally. And the bottom line is people are paying for the poor roads through delays and congestion and repairs to their vehicles,” he said.

The state now charges motorists 19 cents per gallon for gasoline and 15 cents per gallon for diesel fuel. The state gasoline tax was last raised in 1997. Michigan also collects a 6-cents-per-dollar sales tax on what motorists pay at the pump.

Here’s what the change means in practical terms: When drivers now fill up at the pump, they pay the same 19 cents per gallon on gasoline regardless of the per-gallon price. For each 15-gallon fill-up, the tax amounts to $2.85.

Under the wholesale tax, motorists would pay a tax on the wholesale price, which generally is about 50 cents per gallon lower than the retail cost. When purchasing 15 gallons at $3.25 per gallon at the pump, a 6.7 percent wholesale tax would amount to $2.76. The tax on that fill-up would rise to $3.27 if gasoline were priced at $3.75 per gallon.

Gov. Snyder plans to discuss the wholesale fuel tax in a speech Wednesday at Lawrence Technological University in Southfield laying out ways to improve the state’s roads, bridges, water and sewer systems, Internet access and regional transit.

He’ll also announce a contract allowing high-speed data to be sent across fiber optic lines attached to the Mackinac Bridge.

RELATED: Michigan Engineers Group Says State Roads, Bridges Flunk

(TM and © Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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