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Michigan Senate Amends Bill To Double Fuel Taxes To Fix Roads

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This is what one Michigan road looks like after the recent freeze/thaw cycle. (Photo: Mike Campbell/WWJ)

This is what one Michigan road looks like after the recent freeze/thaw cycle. (Photo: Mike Campbell/WWJ)

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LANSING (WWJ/AP) – Will a proposed gas tax be the cure to fix Michigan’s ravaged roads?

The Michigan Senate is considering whether to raise $1.5 billion more a year for infrastructure repairs through fuel-tax increases and other moves.

The Republican-led chamber amended House-approved legislation Wednesday to effectively raise the 19-cents-a-gallon gasoline tax to more than 45 cents by 2018, if fuel prices stay intact. The senators may vote on the plan next week.

The tax increase would be phased in, rising to near 30 cents a gallon in January. It could go up at least 5 cents in each of the following three years.

Senate Majority Leader Randy Richardville says it’s time to fix the roads and a bipartisan deal is within reach.

He told WWJ Lansing Bureau Chief Tim Skubick, with a 7.5 percent wholesale gas tax, the state will raise enough money in the next four years, for permanent repairs.

“That would create, in the first year, somewhere around $600 to $650 million, the next year somewhere around $850 (million), the next year somewhere around a billion, and eventually it would get us to the $1.4 billion, $1.5 billion that we need in order to fix the structural problem,” Richardson said.

Richardville has said he doesn’t want to “hit people all at once” but he’s heard loud and clear that constituents want their roads fixed.

Key elements of the Senate plan would:

- Calculate per-gallon taxes on fuel prices starting next January. The tax would start at 9.5 percent, effectively increasing the state’s 19-cents-a-gallon gasoline tax by 10 cents and doubling the 15-cent diesel tax assuming the statewide average wholesale price of gas is $3. The gas tax would rise to 11.5 percent (around 34 cents) in 2016 if prices stay intact, 13.5 percent (40 cents) in 2017 and 15.5 percent (46 cents) in 2018.

The tax could rise or fall no more than 5 percent in future years to account for any major year-to-year fluctuations in price. A penny increase in fuel taxes generates $50 million in additional revenue.

- No longer allow license plate fees, which are based on a percentage of a vehicle manufacturer’s suggested retail price at the time it is first titled, to drop by 10 percent each year for the first three annual plate renewals, generating $145 million more.

- Permanently dedicate a portion of the 6 percent sales tax at the pump to road, bridges and public transit, setting aside $192 million more by taking it from the state’s general fund.

The senators may vote on the plan next week.

Minority Democrats say they worry that the tax increase would disproportionately hit lower-income drivers. They want assurances that the minimum wage will rise.

TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 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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