LANSING – Legislation sponsored by Sen. John Proos to help the state fix and maintain its roads and highways was approved on Tuesday by the Michigan Senate.
“The goal I set out to accomplish with this reform was maximizing our ability to fix Michigan roads with the resources already available – and without raising taxes,” said Proos, R-St. Joseph. “Since I began public service in the Legislature, Michigan has struggled to identify enough state dollars to allow us to receive federal matching transportation funds. My bill would help solve this problem by using funds already paid by consumers at the pump and investing them in our roads.”
Proos’ measure would require all gasoline and diesel sales tax revenue that is not already constitutionally directed be used only for building and maintaining state roads and bridges.
“This is about both safety and jobs, since quality roads are vital for protecting drivers and attracting tourists and job providers to Michigan. Better maintenance of our infrastructure will reduce the risk of car damage due to potholes and diminish the strain on family budgets,” Proos said. “As a border community, Southwest Michigan is keenly aware of the condition of Michigan’s roads when compared to our neighbors. Improving our roads is critical for us to compete for jobs in an economy increasingly dependent on the efficient transportation of goods.”
Motor fuel in Michigan is currently taxed in three ways. First is the Federal Excise Tax, which is 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel. Second is the Michigan Motor Fuel Tax at 19 cents per gallon for gas and 15 cents per gallon for diesel. Revenue from both of these taxes is restricted to transportation.
The third method is applying the state’s 6 percent sales tax to the fuel wholesale price. More than 80 percent of this revenue is constitutionally earmarked, and the remaining dollars go to the state General Fund to be used as necessary. Senate Bill 351 would direct those additional funds to the State Trunkline Fund, which is used to generate federal transportation matching funds to build and maintain state highways.
“According to Senate Fiscal Agency estimates, had this reform been in effect this year, it would have dedicated $128 million more to fix our roads,” Proos said. “That will help qualify the state to receive federal matching funds at a rate of roughly 4 to 1, and would actually mean more than $400 million in road funding.”