Michigan Transport Plan to Swap Per-Gallon Fuel Levy With Wholesale Tax
Michigan lawmakers last week continued to wrestle with a transportation funding plan that would replace the state’s per-gallon tax on gasoline and diesel with a wholesale sales tax on fuel.
The Senate was considering several measures to generate money for transportation, including one that called for the wholesale tax to be 9%.
The House, meanwhile, has passed a funding package, voting May 8 to set the proposed wholesale tax at 6% for diesel and gasoline, and to index the tax to inflation.
“They want to eliminate the differential between gas and diesel taxes,” said Walter Heinritzi, executive director of the Michigan Trucking Association.
The diesel tax is 19 cents per gallon, and the gasoline tax is 15 cents. Like some states, Michigan also applies its general state sales tax, in this case 6%, to fuel purchases, which increases the amount of tax paid at the pump.
The House package also would direct 4% of the revenue generated by that general sales tax on retail fuel purchases to transportation.
Michigan truckers generally support the House funding package, which includes some higher fees on special truck permits, but they are watching to see the final details when the Senate weighs in, Heinritzi said.
Michigan lawmakers and Gov. Rick Snyder (R) have been trying for four years to reach agreement on a funding plan.
After the House approved its funding package, Snyder said the plan “reflects a serious commitment to tackling” the deteriorating conditions of Michigan’s roads.
“It continues the critical dialogue as we work together to reach the ultimate solution that includes a stable, sufficient, long-term funding source,” Snyder said in a statement.
The House funding package would generate an estimated $400 million more a year for transportation.
State Sen. Mike Kowall (R) told Transport Topics that the state needs at least $1.2 billion more a year just to maintain its badly deteriorated road system.
“We’re hitting critical mass here as far as the roads,” he said. “This winter did not help them at all.”
The governor also has said he wants to hit that $1.2 billion target.
