Gas tax hike: Wrong solution at the wrong time

Dear Friends,

If you’ve traveled around the state recently, you’ll agree that Michigan needs to fix its streets, roads and highways.

A robust transportation system is important to Michigan’s economy, enhances travel safety and reduces wear and tear on passenger and commercial vehicles. We must rebuild our transportation infrastructure. The debate is over how to accomplish the task.

Last month, the Michigan House passed a multi-bill transportation funding package to address the issue. The Michigan Senate took up the bills this week.

The package included positive reforms to dedicate available revenue from sales tax paid on fuel to roads, lower costs through improved competitive bidding, and maximizing the longevity and quality of road work through strengthened project warranties. These steps will provide great value for our residents. I enthusiastically supported those aspects of the package.

In both the House and Senate versions of the bills, per gallon gas and diesel tax increases were proposed. I voted against these fuel tax hikes.

My reason is simple: Michigan families and our economy cannot afford to pay higher taxes at the pump, particularly at a time when gas is near $4 per gallon and the state has a healthy surplus. Period, end of story.

Michigan has made much progress in the last few years but we still have a great deal of work to do. Now is not the time to apply the brakes on the economy or strain family budgets with a fuel tax increase.

That still leaves us with the task of fixing our roads. We need them to be functional, safe and able to support economic growth.

Michigan drivers already pay one of the highest gas and diesel taxes in the nation, yet drive on some of the worst roads. Many folks have asked me the questions, “Why is that? Where does gas tax money go? How is it being spent?”

By law, per-gallon gas and diesel tax and other revenue is dedicated to the Michigan Transportation Fund (MTF), which is governed by Public Act 51 of 1951.

Sales tax is also charged on the fuel you purchase and is included in the price per gallon. A majority of this sales tax collected is constitutionally-directed to our schools and and local revenue sharing. The remainder goes to the state’s General Fund (GF).

The Legislature funds road projects with a combination of dollars from the GF, MTF and federal aid. One step we can take is to place a higher priority for roads with existing General Fund dollars. In fact, this fiscal year alone we have done just that by appropriating nearly half a billion dollars in additional funds for road repairs. This improved commitment must continue.

Yet simply spending more money is not a complete solution. We must ensure that we get the maximum amount of dollars possible to the roads, where it belongs, eliminating as much government waste and unnecessary bureaucracy as possible.

We must be bolder and more innovative in maximizing the value of every single taxpayer dollar that actually makes it to a road project. Although we took some steps in the right direction, the recently adopted common sense reforms did not go far enough.

Indeed, in Lansing’s rush to address the “revenue problem” with a tax increase, it failed to fully resolve those questions my constituents are asking. 

Basic legislative responsibility demands it. The economic and financial challenges we face necessitate it. Taxpayers should expect no less.

That’s why I voted against increases in gas and diesel taxes, which failed to pass the Senate this week. This pause in the often-controversial debate over road funding gives us the opportunity to go back to the drawing board and craft a proposal that delivers the answers you deserve.

Sincerely,
 
Mike Green
State Senator