Tom Warne Report, 22 February 2013
Gov. Rick Snyder has released his new $50.9 billion proposed budget plan to lawmakers, which includes nearly doubling the state’s fuel tax rates. The plan comes just one month after Snyder released a $1.2 billion per year proposal to raise new revenue for transportation. That plan is based largely on taxes and fee increases.
“Let’s get the dollars, let’s get the resources, and let’s get better roads,” Snyder said via Twitter. In his Feb. 6 budget presentation, the governor said he is hoping to replace the current system with a taxation based on the wholesale cost of gasoline. The taxes would be increased with inflation to bring in more than $1 billion annually.
He urged lawmakers to approve plans to change the way the state collects taxes. The state’s existing tax rate on fuel is per-gallon and does not change, nor has the 19-cent gas tax and 15-cent diesel tax been increased by legislators since 1998.
A package of bills in the Senate sought by the governor include a measure to give Michigan voters the final decision on higher prices at the fuel pump. Senate Joint Resolution J would amend the state’s constitution to raise the 6 percent sales tax to 8 percent and spend all new revenue on transportation. In exchange, the state would no longer collect the fuel excise tax. Roads would get almost 90 percent of the new revenue, while transit would get just less than 10 percent.
If these measures fail, SB87 would replace the state’s excise tax with a wholesale tax, with the equivalent for gas and diesel amounting to 37 cents per gallon, with annual adjustments of up to a penny. SB88 proposes an increase to vehicle registration fees, raising fees for small vehicles by 80 percent, and large trucks and trailers by 45 percent.