Michigan Senate approves plan to double fuel tax rates

By Keith Goble, Land Line state legislative editor | 11/14/2014

At the urging of Gov. Rick Snyder, the Michigan Senate voted on Thursday, Nov. 13, to advance an amended plan to potentially raise as much as $1.5 billion annually to fix roads and bridges in the state.

The Senate voted 23-14 to approve a bill that 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 now heads back to the House for consideration of changes. If approved, the bill would replace the excise taxes on April 1, 2015, with a 9.5 percent wholesale tax, which would allow tax collections for gas and diesel to increase with inflation.

The tax rate would increase by 2-percent increments each January until reaching 15.5 percent on Jan. 1, 2018. At that time, it is estimated the tax rate would approach 40 cents per gallon.

Also included in the bill is a provision to boost fines for drivers using dyed diesel on the state’s roadways. Specifically, violations would result in $1,000 fines – up from $200. Repeat offenders would face $5,000 fines.

Snyder has called on lawmakers to raise revenue for transportation work since he took office. The morning after he won re-election on Nov. 4 he renewed his push for legislators to get something done.

Specifically, he called on the House and Senate to spend the next few weeks working out a deal to pay for $1 billion in road improvements.

On Thursday night Snyder commended the Senate for working out a deal.

“The snow falling across our state this week is a reminder of the struggles of last year’s pothole season and the aging bridges crossed by thousands of residents every day,” Snyder said in a news release. “Michiganders want to see a sustainable, long-term approach to our transportation needs.”

The Owner-Operator Independent Drivers Association supports investments into transportation infrastructure.

OOIDA Director of State Legislative Affairs Mike Matousek contacted House Transportation Chairman Wayne Schmidt, R-Traverse City, earlier this year on behalf of professional truckers. At the time, the committee was considering possible revenue enhancers that included toll taxes.

Matousek said he communicated to Schmidt that “if more revenue is needed, increasing the fuel tax is the most equitable and efficient option, so long as the generated revenue is used for its intended purpose.”

The House could take up HB5477 for consideration as soon as Dec. 2 when lawmakers return from a break.

Copyright © OOIDA