Michigan Senate panel approves diesel tax hike to pay for bridges

| 12/9/2009

Truck drivers traveling through Michigan soon could be paying a few cents more per gallon at the pump. The Senate Transportation Committee voted Tuesday, Dec. 8, to approve legislation that would increase the diesel tax by 4 cents per gallon to pay for bridge repairs.

Sponsored by Sen. Jud Gilbert, R-Algonac, the bill approved by a 4-1 vote would increase the diesel tax from 15 cents per gallon to 19 cents – the same as the gas tax.

Like many states, Michigan is in desperate need of more revenue to help fund transportation work. SB862 would generate an estimated $36 million a year, according to the Senate Fiscal Agency.

Truckers who save a few cents per gallon because they use biodiesel would also be affected. Currently, diesel fuel that contains at least 5 percent biodiesel is taxed at 12 cents per gallon. Gilbert’s bill would apply the 19-cent-per-gallon rate to those trucks.

A separate bill – SB863 – from Gilbert that gained passage in the committee specifies that the revenue be used solely to repair bridges. Half the increase would be allotted for state bridges while local bridges would get the rest.

Company driver and OOIDA Life Member Bob Esler of Taylor, MI, said he understands the need to increase the tax to boost revenue. But he has concerns about who would be left out of paying the higher tax rate. As written, the tax increase would primarily apply to interstate trucking operations while intrastate truckers would continue to pay 15 cents per gallon.

“I wouldn’t be opposed to a fuel tax increase. But they can’t give intrastate guys a break. So I would have to oppose the bill on the merit that there should be no exemption. Everybody should be paying the same,” Esler told Land Line.

Owner-operator and OOIDA Life Member John Mordus of Shelby Township, MI, isn’t surprised that lawmakers are calling on truckers to help bail them out of another financial jam. But Mordus said there’s nothing left for truckers to give them.

“They’re trying to pass anything they can to raise money because they are so far in debt. But the thing is it’s not here. What they’re trying to do is get blood out of a turnip,” Mordus said.

“They’re just trying to squeeze and there’s no more to squeeze.”

Esler and Mordus also question how the state would police who is paying what at the diesel pump.

The bills now move to the Senate floor where passage isn’t assured.

Senate Majority Leader Mike Bishop, R-Rochester, has indicated he doesn’t believe the time is right to increase the tax. In addition, he recognizes that the $36 million expected to come from a diesel tax increase is not going to solve the transportation funding crisis.

If the legislation somehow emerges from the Senate, it would still need to pass muster in the Democrat-led House.

To view other legislative activities of interest for Michigan in 2009, click here.

– By Keith Goble, state legislative editor

Editor’s Note: Please share your thoughts with us about the legislation included in this story. Comments may be sent to statelegislativedesk@ooida.com.