Michigan bills would boost fuel tax rates

| 5/9/2007

Bipartisan legislation in the Michigan House looks to increase the state’s per-gallon fuel tax rates to generate more than $1 billion in new funding each year for road work.

House Transportation Committee Chairman Hoon-Yung Hopgood, D-Taylor, has introduced a measure – HB4576 – that would boost the state’s 15-cent-per-gallon diesel tax by 13 cents during the next three years. It also would increase vehicle registration fees by 50 percent.

House Minority Leader Craig DeRoche, R-Novi, has offered a bill – HB4575 – that would raise the state’s 19-cent-per-gallon gas tax by 9 cents during the next three years.

The 6 percent general sales tax added to fuel purchases would be unchanged.

The bills would increase the fuel tax rates to 22 cents per gallon next year. Two annual increases of 3 cents per gallon would follow in 2009 and 2010, taking the rates up to 28 cents per gallon.

Revenue from the tax increases would top $1.1 billion with about 40 percent earmarked for state highways and the rest for city and county projects, The Times Herald of Port Huron, MI, reported.

Supporters say the tax increases are needed to keep up with the inflation rate. They also say that improved roads will attract more business and create jobs.

Opponents say there are more viable alternatives to pay for road work.

“What we don’t need is more taxes,” Rep. Jack Hoogendyk, R-Texas Township, said in a written statement. “We can improve the quality of our roads by shifting revenue we already generate rather than asking taxpayers to shoulder more of the burden.”

Both bills are in the House Transportation Committee.