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Michigan Legislature Adjourns Without Gas Tax Hike

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By David Eggert, Associated Press

LANSING (AP) - The Michigan Legislature adjourned late Thursday for much of the summer without voting to pump more money into road improvements after election-year talks broke down over a gradual gasoline tax increase.

Senators a day earlier had balked at a major plan to more than double fuel taxes over five years to raise at least $1 billion to fix deteriorating roads and bridges. An attempt to pass a more modest proposal to boost fuel taxes to keep pace with inflationary road construction costs never gained muster in the Republican-controlled Senate Thursday despite a similar plan winning bipartisan support in the GOP-led House last month.

Legislative leaders said they would study the issue over the summer and take it up again in the fall. Michigan spends less per driver on roads than any other state, yet also has some of the country’s highest taxes at the pump because the sales tax applied to motor fuel mostly goes to schools and local governments under the state constitution.

The scaled-back plan would have let the 19-cents-a-gallon gas tax rise each year by whatever is less – 5 percent or the annual change in highway construction costs. The tax would have been capped at 32 cents a gallon. It would not come close to raising the minimum $1.2 billion to $2 billion more a year that Gov. Rick Snyder and others say is needed now to bring the transportation system up to par.

Lance Binoniemi, vice president of government affairs for the Michigan Infrastructure & Transportation Association, a construction trade association, said the alternative plan “would not have done anything, really. You’re not repairing any roads on that.”

He said if the Senate had passed its original proposal, “We could have put people to work and could have put more projects on the ground and really slowed the deteriorating of roads.”

Snyder, a Republican, said he would not have been satisfied with Plan B as a long-term solution but saw it as a positive step to help address the structural problem of declining gas taxes – caused by people driving less and with more fuel-efficient cars. The per-gallon gas tax was last increased, by 4 cents, in 1997.

“There’s just more work to be done,” Snyder said after lawmakers adjourned, a blow to advocates of more transportation spending who believe the public’s openness to paying higher taxes increased when roads became peppered with potholes after the severe winter. He said it was “unfortunate” that players involved in the process became more “political” in an election year.

Democrats laid the blame on Snyder and fellow Republicans who control the Legislature.

“The Republican commitment was not lived up to,” said Senate Minority Leader Gretchen Whitmer, D-East Lansing.

She said two-thirds of her 12-member caucus joined with one-third of 26 Republicans on Wednesday to back the first plan, gradually raising the current gasoline tax to 41 cents, or potentially more if wholesale prices were to rise, by 2019.

Once that vote – which was tied to tax relief for homeowners and renters Democrats wanted – fell short, Democrats opposed scaled-back alternatives as lacking.

Republicans countered that Democrats should have helped pass a backup plan while work continues on a comprehensive solution.

“The other side of the aisle didn’t want to participate in fixing the problems that we could … and voted against most of them,” said Senate Majority Leader Randy Richardville, R-Monroe.
He plans to convene a workgroup to tackle road funding over the summer and make recommendations in September.

The Senate is scheduled to be in session two days before Labor Day, the House for four days – as many legislators prepare for the August primary. The chances of legislative action in September before the November election appear slim.

“It’s a difficult vote. It’s an election year. But sooner or later, you’re going have to bite the bullet and do the difficult things,” Richardville said. “It’s got to be increased revenue in order to finish this problem.”

Because plans to boost fuel taxes are stalled, other transportation-funding bills that have cleared the House and Senate are on hold.  They would increase the 15-cents-per-gallon diesel tax to the equivalent of the 19-cent gas tax, make vehicle registration fee changes and shift sales tax collected at the pump not already constitutionally earmarked for schools and local governments to transportation.

MORE: Michigan Legislature OKs $53.2 Billion Budget

© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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