Michigan governor says gas tax increase a no-go for roads

| 1/3/2008

Like nearly every other state, Michigan is in need of more money to make repairs to roads and bridges throughout the state. However, Gov. Jennifer Granholm has said she doesn’t want to increase the fuel tax rates to help reduce the funding gap.

The state has an estimated $700 million annual shortfall in maintaining roadways managed by the Michigan Department of Transportation. Local routes have repair needs of at least $2 billion.

Some road building and business groups have touted the benefits of boosting the state’s gas tax rate by 3 cents each of the next three years to 28 cents per gallon. The plan could generate $425 million in annual revenues at the end of the three-year period, The Associated Press reported.

The per-gallon tax on gasoline is 19 cents.

Other possibilities suggested by the road building and business groups to generate revenue include increasing the 15-cent-per-gallon tax on diesel to at least 19 cents and dedicating a portion of vehicle registration fees to roads.

Granholm said a study group soon will look at possible solutions. In the meantime, she recently signed legislation setting up an Alternative Road Funding Task Force.

The task force will include legislative leaders and representatives of manufacturing, tourism and public transportation, among others. The bill also sets up an advisory panel made up of roads builders and business and government groups to submit its own report to the task force.

Transportation funding options are expected to draw consideration during the regular session that begins Jan. 9.

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

– By Keith Goble, state legislative editor