By Carolyn Kramer, manager, Transportation Investment Advocacy Center
The Michigan House of Representatives Oct. 21 passed a transportation funding plan that could generate an estimated $1.2 billion per year.
If approved by the Senate and Gov. Rick Snyder (R), the proposal would gradually increase the state diesel tax by 7.3 cents-per-gallon and the gas tax by 3.3 cents-per-gallon, as well as tax alternative fuels at the state motor fuel tax rate. Starting in October 2022, state motor fuels and alternative fuels taxes would annually adjust based on changes in inflation as reported by the Consumer Price Index, with a cap to ensure the tax does not raise more than five percent per year.
The package of bills also includes a 40 percent increase for vehicle registration and a new annual registration fee for electric and hybrid vehicles. Additionally, the plan would transfer $600 million per year from the General Fund to the state Transportation Fund.
The Republican-sponsored bills were narrowly passed along party lines, with Democrats opposed to the $600 million transfer and income tax breaks for the state’s wealthiest citizens. Gov. Snyder also has voiced concerns about the plan.
This is the second transportation funding plan the Michigan House has approved this year. Read the legislative analysis.
The package now goes to the Senate for consideration, who passed their own plan July 1.