Michigan House Bill Would Hike Revenues, Shift General Funds Into Road Work

AASHTO Journal, 23 October 2015

The Michigan House of Representatives passed a plan to fix the state’s roads that includes $600 million worth of hikes in motor fuel taxes and vehicle registration fees plus a $600 million shift of money from the state’s general fund to the road projects.

However, the measure the House approved reportedly faces challenges from both Gov. Rick Snyder and the Senate, along with minority Democrats who object to provisions that also roll back some income tax levels.

Midot-inside.jpg The Detroit Free Press said Snyder – who has pushed hard in the past year for plans to generate more funding for transportation improvements – wanted no more than $400 million of general funds shifted to transportation. It reported that business groups in the state have taken the same position.

The newspaper said the House package, called the 600-600 plan, would phase in the general fund transfer starting in 2019.

Starting in 2018 it would phase in a 7.3-cent increase in per-gallon roadway user fees on diesel fuel that is mainly used by commercial trucks, and a 3-cent hike for gasoline, to raise $200 million. And in 2022 it would index the motor fuels tax to inflation.

It would generate $400 million in new revenue through a 40 percent increase in vehicle registration fees starting Oct. 1, 2016, and levy a new surcharge for electric-powered vehicles.

But the House plan would not produce $1.2 billion a year in new transportation funding, an amount experts say is needed, until 2021.

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