Michigan Senate amends bill to double fuel taxes

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LANSING, Mich. (AP) — The Michigan Senate set the stage
Wednesday for a potential vote on a plan to raise $1.5 billion more a
year to fix deteriorating roads, primarily through a significant hike in
fuel taxes paid by drivers.
The chamber revised a House-approved
transportation funding plan but stopped short of voting until next week,
to see if majority Republicans and minority Democrats can strike a
bipartisan deal to boost what often is seen as a third rail in politics:
gas taxes. Democrats, for instance, want assurances that Michigan’s
minimum wage will be increased.
Key elements of the Senate plan would:

Calculate per-gallon taxes on fuel prices starting next January. The
tax would start at 9.5 percent, effectively increasing the state’s
19-cents-a-gallon gasoline tax by 10 cents and doubling the 15-cent
diesel tax assuming the statewide average wholesale price of gas is $3.
The gas tax would rise to 11.5 percent (around 34 cents) in 2016 if
prices stay intact, 13.5 percent (40 cents) in 2017 and 15.5 percent (46
cents) in 2018.
The tax could rise or fall no more than 5 percent
in future years to account for any major year-to-year fluctuations in
price. A penny increase in fuel taxes generates $50 million in
additional revenue.
— No longer allow license plate fees, which
are based on a percentage of a vehicle manufacturer’s suggested retail
price at the time it is first titled, to drop by 10 percent each year
for the first three annual plate renewals, generating $145 million more.

Permanently dedicate a portion of the 6 percent sales tax at the pump
to roads, bridges and public transit, setting aside $192 million more by
taking it from the state’s general fund.
"If we don’t do
something about the roads this year, we’re shirking our responsibility,"
said Senate Majority Leader Randy Richardville, R-Monroe. "We were sent
up here to lead and to take on tough issues. I think that we’re ready
and people are going to step up to the plate."
But there is no guarantee the Senate, where 26 of 38 members are Republicans, will support a major tax
hike.
"The first option always considered in Lansing appears to be: ‘Raise taxes,’" said Sen. Patrick
Colbeck, R-Canton Township.
The
less controversial House proposal would raise $450 million more a year
for Michigan’s $2.7 billion road and bridges budget and has been called a
positive step forward after years of legislative inaction. But
Republican Gov. Rick Snyder and others say between $1.3 billion and $2
billion is needed at a minimum to bring roads up to par or else the
system will fall further into disrepair.
Richardville estimated
the Senate bills would put up to $700 million more into roads in the
first year and $1.5 billion above current levels by 2018.
Flat
per-gallon fuel taxes — last raised in 1997 — have been faulted for
declining state transportation revenue as people drive less and with
more fuel-efficient vehicles.
Snyder says residents pay hundreds
of dollars annually on unnecessary vehicle repairs due to shoddy roads.
The business community contends that failing to address aging
infrastructure is bad for economic development, and organized labor says
additional road construction creates jobs.
Democrats also have
concerns about the Senate legislation, noting that it does not include a
House-passed bill that would raise fees and fines on overweight trucks.
The panel’s chairman, Sen. Roger Kahn, R-Saginaw Township, said he
plans to have hearings on the rest of the House package starting next
week.
"A low-income family, someone that’s working minimum wage
and has to drive 15, 20 miles to get to their job, it’s going to be a
lot harder for them to make ends meet now," said Robert McCann,
spokesman for Senate Minority Leader Gretchen Whitmer, D-East Lansing.
"We’re trying to fight for more fairness in this bill and get something
that gets the investment we need in our roads."

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