Say good-bye to Michigan’s fuel tax?

| 10/27/2011

A plan to improve Michigan roads and create better jobs was unveiled Wednesday, Oct. 26, by Gov. Rick Snyder. The plan includes a first-of-its-kind initiative to eliminate the state’s fuel tax.

Speaking to the Legislature on Infrastructure, the governor announced his strategy to increase transportation funding and improve roads, bridges and public transit.

“Michigan’s infrastructure is living on borrowed time,” Snyder said in prepared remarks. “We must reinvest in it if we are to successfully reinvent our economy.”

Snyder said the public is not happy with the condition of roads and yet the state is faced with a $1.4 billion shortfall simply to maintain the current system.

Among the governor’s recommendations is to make dramatic reforms to Michigan’s transportation user fees. He wants to eliminate the state’s 19-cent-per-gallon gas tax and 15-cent-per-gallon diesel tax in favor of a percentage wholesale tax on fuel.

Snyder said the change is a more viable long-term funding approach. The percentage tax would tie revenues to the pump price as it rises and falls instead of linking it to fuel consumption.

Another recommendation from the governor is to increase state and local vehicle registration fees by $10 per month on the average vehicle. Snyder said such a boost would raise $1 billion to $1.4 billion each year.

Also addressed by the governor are the Michigan truck drivers and many other residents who are resistant to paying more for transportation. A common complaint is that the state mismanages revenue already available.

Snyder called for further cost savings and efficiencies that include allowing counties to absorb their county road commissions. He said the move would ensure greater accountability.

Another change would be to give the state authority to audit county road agencies.

Also proposed by the governor is cutting off state road funds for communities that receive less than $50,000 annually. Instead of going to municipalities, money would stay with the roads.

In addition to funding improvements for roads and bridges, Snyder said it is essential to Michigan’s future to further develop bus and rail transit, aviation systems and ports.

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

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