Michigan pursues road funding solutions via tax proposals

| 8/15/2008

With their state struggling to come up with solutions to help pay for road work, three Michigan state lawmakers are hopeful their tax proposals will gain favor at the statehouse. Local voter approval would be required for their passage.

Reasons given for the shortage in the transportation budget include higher fuel costs and soaring road construction expenses. A decline in fuel purchases, which results in less tax revenue for the state, also is a contributing factor.

Rep. Marty Knollenberg, R-Bloomfield Township, has offered one proposed solution – HB6322 – that would give counties multiple local funding options. Counties could increase the tax on gasoline and diesel by 3 cents per gallon. Two adjacent counties could join to impose a tax of up to 5 cents per gallon, and three adjacent counties could impose a tax of up to 7 cents per gallon.

Taxes collected would be required to be deposited into the state’s transportation fund for road work and repair, as well as public transit.

Two more revenue-generating measures would mandate that all fees collected be used solely for road work, public transit, rail service and landscaping.

Sponsored by Rep. Gabe Leland, D-Detroit, the first bill – HB6324 – would authorize counties to impose a real estate transfer tax based on a home’s value. Rep. Pam Byrnes, D-Lyndon Township, is the sponsor of another bill – HB6325 – that would authorize counties to apply an additional tax on vehicle registration fees.

The local-option bills are in the House Transportation Committee. They join statewide measures that would boost the state’s 15-cent-per-gallon diesel tax by 13 cents during the next three years, increase vehicle registration fees by 50 percent, and raise the state’s 19-cent-per-gallon gas tax by 9 cents during the next three years.

The statewide bills – HB4576 and HB4575, respectively – also are in the House Transportation Committee.

To view other legislative activities of interest for Michigan in 2008, click here.

– By Keith Goble, state legislative editor