A deal is done at the Michigan statehouse to ultimately raise $1.2 billion annually for roads and bridges throughout the state.
House and Senate lawmakers voted mostly along party lines on Tuesday, Nov. 3, to send a multi-bill package to the governor that is billed to fix the state’s ailing road and bridge system.
The main part of the Republican-led package calls for raising the state’s 19-cent-per-gallon gas tax rate by 7.3 cents to 26.3 cents on Jan. 1, 2017. The 15-cent diesel rate would increase by 11.3 cents to 26.3 cents.
In addition, the tax rates would be linked to the consumer price index in 2022, which would allow tax collections to increase with inflation.
Changes in the fuel tax rates are estimated to raise $400 million annually.
Gov. Rick Snyder congratulated the Legislature for approving what he referred to as a “fiscally responsible, comprehensive transportation plan that provides a long-term solution” for transportation infrastructure.
“These are difficult decisions. If left unaddressed, our infrastructure problems would have grown more expensive to fix, there would have been greater damage to our vehicles and, more importantly, more drivers left to face unsafe conditions,” Snyder said in prepared remarks following passage of the seven-bill package.
Another component in the package would increase vehicle registration fees on Jan. 1, 2017, by 20 percent for cars and large trucks. The bill is expected to generate about $200 million per year.
The package also authorizes an annual transfer from the state’s $9.9 billion general fund to roads. The first transfer would shift $150 million between the accounts and increase to $600 million by 2021.
Critics of the package say it will take five years for the state to build up to the $1.2 billion in annual revenue touted by supporters. House Democrats also cite concerns that transferring money from the general fund will hurt programs that include public safety, education and health care.
“The Republican proposal raises taxes on middle-class families, does nothing to lower truck weights, and drains funding from education and public safety,” House Democratic Leader Tim Greimel of Auburn Hills stated. “Even worse, it doesn’t even start fixing our roads until 2021.”
Sen. Patrick Colbeck, R-Canton, said during discussion on the Senate floor that he voted against the revenue package because it represents politics as usual.
“Too much effort has been focused on finding ways to throw more money at the roads and too little effort has been expanded toward increasing the quality of our roads,” Colbeck said.
A transportation funding solution has been a hard sell at the statehouse in recent years. Late last year the GOP-controlled Legislature endorsed a plan to allow voters to make the final decision.
In May, voters resoundingly rejected a statewide sales tax increase to raise $1.27 billion annually for roads and bridges. Also included in Proposition 1 were plans to convert the state’s gas and diesel tax rates to a wholesale rate, which would allow tax collections to increase with inflation.
Rep. Rick Outman, R-Six Lakes, said lawmakers this week did what they needed to do to improve the quality of the state’s roads and bridges.
“I am happy we have approved a long-term, sustainable source of funding that is fair and balances the cost for safer roads and bridges between prioritizing existing money and raising new revenue.”
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