Michigan bill would route more tax to roads

| Thursday, August 25, 2011

The ongoing wait for direction from the feds on transportation funding continues to force states to turn over every stone to come up with money for road work. In Michigan, one bill is intended to help ensure that more money collected at the fuel pump is used on pavement.

When truckers and other drivers fuel up in Michigan, the tax money is distributed to the state’s fuel excise tax, the federal fuel excise tax, and the state’s sales tax.

Michigan law applies the excise taxes, but not the 6 percent sales tax, to roads. Sales tax revenue is routed to the state’s General Fund.

House Transportation Committee Chairman Paul Opsommer, R-DeWitt, wants to make sure more of the tax money is applied to roads.

His committee voted to approve legislation that addresses where the sales tax is earmarked.

“Transportation revenue can no longer afford to subsidize other funds and programs, especially when we can’t afford to even adequately keep up with potholes,” Opsommer said in a statement.

A legislative analysis shows that redirecting revenue to roads would amount to another $112.7 million now that fuel is flirting with $4 per gallon.

“More of what we are already paying at the pump has to be used where we expect government to use it, for our roads and highways.”

The bill – HB4521 – is awaiting consideration on the House floor. If approved there, it would advance to the Senate.

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

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