Michigan Senate votes to double state gasoline tax to raise at least $1B to improve roads



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FILE- In a Feb. 28, 2013 photo, Frank Pena waits for traffic to clear to fill potholes on southbound Greenfield Rd., in Southfield, Mich. The Michigan Senate has voted to double the state gasoline tax over four years to raise at least $1 billion to fix roads. Michigan's per-gallon gas tax is a flat 19 cents. A bill approved 23-14 Thursday, Nov. 13, 2014, and sent to the House calls for taxing fuel on the wholesale price. The gas tax would effectively rise to 25 cents in April, 31 cents in 2016, 36 cents in 2017 and 41 cents in 2018 based on current prices. (AP Photo/The Detroit News, Dan Mears, File)


LANSING, Michigan — The Michigan Senate voted Thursday to more than double the state gasoline tax over four years to raise at least $1 billion to fix roads, a major step toward a possible comprehensive road funding deal that Gov. Rick Snyder has made a top priority before year's end.

The state's per-gallon gas tax is a flat 19 cents.

A bill approved 23-14 and sent to the House would begin to tax fuel on the wholesale price in a bid to address declining state transportation revenue blamed on people driving less and with more fuel-efficient vehicles. The gas tax would effectively rise to 25 cents in April, 31 cents in 2016, 36 cents in 2017 and 41 cents in 2018 based on the current average wholesale price.

Thirteen Republicans and 10 Democrats in the GOP-controlled chamber voted for the fuel tax increase. Twelve Republicans and two Democrats voted against it.

The Senate had rejected a similar plan in June, before senators ran for re-election in primary and general elections.

"It's a first step. It's a big step. ... In a bipartisan way, the Michigan Senate was ready to say, 'We want to fix roads and we'll take tough votes to do it,'" Senate Majority Leader Randy Richardville, a Monroe Republican, told reporters.

Now attention turns to the GOP-led House, which earlier this year passed a more modest proposal to boost fuel taxes to keep pace with inflationary road construction costs.

The $450 million House plan would tax fuel at 6 percent of the wholesale price and effectively keep the 19-cent rate intact to start. If fuel prices rise from one year to the next, the tax could rise by whatever is less — 1 cent, 5 percent or the annual change in highway construction costs. Gas and diesel taxes could ultimately go as high as 32.5 cents a gallon, though it would be decades before the ceiling is hit.

Lawmakers will return in December for three weeks of "lame-duck" voting after a two-week hunting and Thanksgiving holiday break.

Snyder, a Republican, applauded the Senate's bipartisan vote and said in a statement that "Michigan needs to invest in modern, well-maintained roads to keep our state moving forward."

Senate Minority Leader Gretchen Whitmer, an East Lansing Democrat, acknowledged that drivers could "struggle" to pay a higher gas tax. But she said Democrats won assurances that a bill the Senate passed in June to restore $200 million in tax breaks for lower- to -middle-income homeowners and renters would move in conjunction with any final road-funding fix.

She also is satisfied that neither Snyder nor GOP leaders are interested in "partisan" bills next month to change how presidential electoral votes are awarded or repeal a law that guarantees better wages on government construction projects.

"There's no denying that the quality of our roads has a cost that comes along with them in terms of safety but also maintenance," Whitmer said. "The biggest cost would be to continue to try to push it off and not take action."

Earlier Thursday, the Senate fell eight votes short of the 26 needed to pass an alternative plan — asking voters to amend the state constitution to raise the sales tax from 6 percent to 7 percent and dedicate the extra revenue to roads. Richardville said the proposal could be revived depending on talks with House leaders, though Whitmer said the gas tax increase is an immediate long-term solution.

Sen. Bruce Caswell, a Hillsdale Republican, voted against the gas tax hike but supported the sales tax increase, saying it would be fairer to lower-income residents.

"Those people who are economically struggling now are going to be placed under even more pressure because their cars don't get the good gas mileage," he said.

Michigan spends less per driver on roads than any other state, according to the state Transportation Department, yet also has some of the country's highest taxes at the pump because the sales tax applied to motor fuel mostly goes to schools and local governments under the state constitution.

The business community, organized labor and other interests say an additional $1.2 billion to $2 billion a year is needed to bring Michigan's transportation system up to par.


Online:

House Bills 5477: http://1.usa.gov/1130724


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