Michigan bills pursue road funds through multiple sources

| 12/16/2009

Money matters continue to dominate discussion at the Michigan statehouse with lawmakers pursuing changes to policy and budgets to help plug holes. Among the options being considered to generate more money for transportation include increasing the diesel tax, adding funds for local roads, and targeting unpaid parking tickets.

A bill awaiting consideration before the full Senate would increase the motor carrier fuel tax by 4 cents per gallon to 19 cents – the same as the gas tax. The motor fuel tax would stay at 15 cents per gallon.

As written, SB862 primarily applies to interstate trucking operations while intrastate truckers would not be affected.

The motor carrier fuel tax is applied to truck drivers licensed under the International Fuel Tax Agreement. Only interstate motor carriers are subject to the motor carrier fuel tax.

Sponsored by Sen. Jud Gilbert, R-Algonac, the bill has received heavy criticism from truckers questioning why the state would leave anyone out of the proposed increase. They also want to know how the state would decide who does and who doesn’t owe the higher tax. In addition, there is a question about the bill’s constitutionality.

Gabe Basso, Gilbert’s legislative director, said that lawmakers are working to eliminate the concerns and to make sure everyone putting diesel into their tanks is paying 4 cents more to help fund bridge repairs.

“Gilbert’s bill cannot be enacted on its own. There’s a constitutional issue. If we were to apply this tax only to interstate carriers, and not intrastate carriers, we’d have a commerce clause violation,” Basso told Land Line.

Basso said another bill is in the works to resolve the issue.

A separate bill awaiting consideration on the Senate floor would let county road commissions use more money from the Michigan Transportation Fund on the county local road system.

State law now limits to 30 percent the Michigan transportation tax revenues returned to counties that can be used on the county local road system, rather than on the county primary road system. Sponsored by Sen. Gerald Van Woerkom, R-Norton Shores, the bill – SB995 – would increase that threshold to 50 percent.

Made up mostly of revenue from fuel taxes and vehicle registrations, $593 million from the transportation fund is allotted to the state’s 83 county road commissions in the current two-year fiscal period.

Local governments are getting creative in an effort to resolve funding issues. Trying to combat the cash crunch, two bills would benefit city and county governments looking to fill budget gaps.

One bill would tap unpaid parking tickets to provide a boost for local governments. Awaiting consideration in the Senate Transportation Committee, HB4726 would allow the state to block driver’s license renewals for people who accumulate three or more unpaid parking tickets.

The House has already signed off on the effort.

Michigan law now requires six or more unpaid parking tickets from the same community before a hold can be put on a motorist’s driver’s license renewal. Those people found in violation can get their licenses renewed only after paying the overdue fines and a $45 clearance fee.

Supporters say that communities stand to receive a shot in the arm for transportation funding if the bill goes through. In Detroit alone, the city has $30 million in parking tickets that are outstanding, The Detroit News reported.

Another bill, which is also intended to boost road funding options for local governments, would repeal a ban on counties using general property tax revenue for road construction and maintenance. HB5141 would allow counties with a surplus of money in their general fund to use a portion of the revenue for roadwork.

It is in the House Transportation Committee.

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.