A Michigan House plan to raise $450 million annually for transportation is halfway through the statehouse. The amount is less than half of the $1.2 billion that Gov. Rick Snyder has called on lawmakers to raise for transportation work.
The House voted on Thursday, May 8, to advance to the Senate a road and bridge funding package one day after two House committees sent the bills to the chamber floor. The package includes four areas of focus: increased efficiency, improved quality, improved fairness and investing current resources from fuel sales back into roads.
House Speaker Jase Bolger, R-Marshall, said it is long past time that lawmakers approved a long-term transportation funding plan.
“After our roads had been neglected for too many years, we have led the way with one-time investments in roads for each of the past three years,” Bolger said in prepared remarks. “Now it’s time to make structural changes that will continue and build upon that trend.”
One bill would repeal the state’s per-gallon tax rate on gas and diesel. Lawmakers haven’t increased the 19-cent-a-gallon gas tax since 1997. The 15-cent-a-gallon diesel tax has remained unchanged since 1984.
HB5477 would replace the excise taxes with a 6 percent wholesale tax, which would allow tax collections to increase with inflation.
Initially, the change would be revenue neutral for gas-buying consumers. Over time, they would pay more as fuel prices increase.
Truckers and other diesel buyers would start paying 19 cents per gallon on Oct. 1.
Bolger said the change would provide for parity between diesel and gas taxes.
The bill would raise an estimated $35 million more from diesel fuel in the first year.
Starting in the fall of 2015, an annual cap limiting tax rate increases to just below 1 cent would be imposed. In addition, a 19-cent rate floor and 32.5-cent ceiling would be set.
At current consumption rates, the state estimates the changes would generate $40.6 million a year in new revenue from gas and diesel purchases.
Also advancing to the Senate are bills that would increase oversize and overweight fees and fines. The state now raises about $4.3 million annually from permit fees.
Michigan law sets single-trip oversize/overweight permit fees at $50. Multiple-trip permit fees are $100.
HB5452 would double single-trip fees to $100 and increase multiple-trip fees to $500.
Oversized loads now carry a $15 fee for a single trip and $30 for multiple trips.
The bill would set fees for oversized loads at $30 for a single trip and $150 for multiple trips.
According to a fiscal note, the changes would raise an additional $11.1 million annually from permit fees.
Supporters say the changes are needed to put Michigan on par with neighboring states.
Another bill, HB5453, would double fines for overweight trucks.
More than a dozen trucking operations were represented this week during a House Transportation and Infrastructure Committee hearing. They voiced strong opposition to the increase sighting unavoidable circumstances such as load shifting that could result in fines of several thousand dollars.
“We’re not trying to make money on overweight fines,” Rep. Marilyn Lane, D-Fraser, said in response to testimony in opposition to the bill. “The goal isn’t to make money off truckers or run anybody out of business. The point is to try to make certain people stay within the law.”
Thomas Nelson, an attorney representing multiple trucking companies, cautioned lawmakers that increased fines would result in more litigation as businesses challenge fines.
He also pointed out that fines for overweight trucks are not routed to roads.
Other parts of the plan include:
- HB5459 would route a portion of the existing 6-percent sales tax collected at the pump to roads. Currently, the revenue is routed to the state’s general fund. The switch would generate $130 million a year for transportation work.
- HB5460 would increase warranty requirements on road and bridge improvement projects.
One bill that was left behind this week in the House Transportation Committee would authorize public-private partnerships.
HB4925 would permit the Michigan Department of Transportation to make deals with private groups for such projects as new highway capacity, rest areas and cell towers.
OOIDA is on the record as opposing the bill. One point made by the Association in a letter submitted to committee Chairman Wayne Schmidt, R-Traverse City, is that toll taxes are financially crippling to small-business truckers.
Lane said it might be necessary to remove language in the bill that would authorize tolls.
The panel is expected to continue discussion on the bill.
Copyright © OOIDA