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Gov. Gretchen Whitmer’s pro­posed fuel tax for Michigan would be the highest in the country. Pexels

Michigan Gov. Gretchen Whitmer’s pro­posed gas tax would cat­apult Michigan into first place for the highest fuel tax in the country. 

Whitmer made fixing Michigan roads a pri­ority in her guber­na­torial race, but her pro­posal faces serious oppo­sition from Repub­licans, who promised to shoot down Whitmer’s pro­posed 45-cent-per-gallon gas tax. 

“We’d have the highest gas tax and the highest auto insurance. It’d be laughable if it wasn’t the gov­ernor of the state proposing it,” Rep­re­sen­tative Eric Leutheuser, Dis­trict 58, said. “It’s 100 percent the wrong solution for Hillsdale County or any rural parts of the state — which is 90 percent of the state.”

Michigan drivers cur­rently pay a 26.3-cent per gallon state fuel tax, as well as the 6 percent state sales tax — placing Michigan in sixth place for the highest total pump tax in the nation. 

Michigan still spends less on highways com­pared to other states per capita, and the con­dition of Michigan’s roads merited a D- from the 2018 American Society of Civil Engi­neers.

Whitmer’s plan would raise fuel taxes incre­men­tally, beginning with a 15-cent tax on the first of October, and adding another 15-cent tax in April and in October of 2020.

This would raise $2.5 billion in gas taxes per year, but it would only increase road funding by $1.9 billion. That’s because her pro­posal dis­mantles part of the 2015 road deal, which ded­i­cated $600 million from the income tax to the trans­portation fund.

The 2015 road deal promised to raise $1.2 billion to fix the roads by 2021. It is phasing in fuel tax and reg­is­tration fee increases, as well as fun­nelling $600 million from the general fund into fixing the roads each year. It was sup­posed to raise roughly $880 million this year. 

Whitmer argued that the 2015 plan only slowed the decline of the roads instead of actually fixing them. 

“We have the worst roads in the country, and I am proposing a plan that will per­ma­nently fix our roads while keeping the costs fair for seniors and low-income fam­ilies,” Whitmer said in a press release. “I know this won’t be easy, but with one his­toric vote we can make the invest­ments that are nec­essary to finally start fixing the damn roads.”

Whitmer’s pro­posed tax would charge drivers an extra $600 per household, according to Mackinac Center’s Director of Fiscal Policy James Hohman.

“The people of the state will never ever support a 45 cent gas tax hike, so their rep­re­sen­ta­tives in the capitol are no going to support it either,” said Speaker of the House Lee Chatfield’s spokesperson Gideon D’Assandro. “This plan is not going to happen, and rightly so. It’s a non-starter.”

In 2018 the leg­is­lature fun­neled an extra $357 million surplus general funds into repairing the roads. Michigan Trans­portation Department offi­cials have argued that the funding isn’t nearly enough to repair crum­bling roads.

Gas taxes put the burden of main­taining the roads on the drivers who use them, but average drivers aren’t nec­es­sarily the ones causing the most damage. Michigan doesn’t impose weight-dis­tance taxes on heavy trucks, which is one way to avoid hefty taxes at the pump, said Hillsdale College Pro­fessor of Political Economy Gary Wolfram.

“The gas tax is a decent mech­anism for com­bining the use of public infra­structure with the pay­ments needed to keep it up,” Wolfram said. “The gas tax is a mech­anism that links the use of the roads to how you pay for it. If you drive a lot of miles and use a lot of gasoline and wear out the roads, you should pay more than the person that just rides their bicycle.”

But Repub­licans carar­ic­tured Whitmer’s budget as an income tax hike in dis­guise. 

Wolfram worried that Whitmer’s plan drains money from the trans­portation fund. While imposing a fuel tax to fix the roads, her plan would shift $600 million in annual income tax revenue away from the trans­portation fund, freeing funds for her other budget pri­or­ities. Wolfram com­pared her plan to the Michigan lottery debacle, in which leg­is­lators promised to funnel lottery taxes into the School Aid Fund but then siphoned away money from the General Fund into other projects. 

“It’s going to be a tough sell to raise taxes by $2.5 billion to spend an addi­tional $1.9 billion on the roads,” Hohman said. “That dis­crepancy between what you’re calling for in actual road spending and what you’re raising in taxes is a problem.”

Despite calling Whitmer’s plan a “dis­ap­pointment,” Repub­licans said they remain invested in fixing the roads. 

“Everyone is inter­ested in addi­tional investment to help fix the roads, the question is what exactly that looks like,” D’Assandro said.

  • Jen­nifer Melfi

    I thought repub­licans liked bal­anced budgets and con­sumption taxes? This must be the new Hillsdale where these things are den­i­grated if they are pro­posed by “Dum­b­ocrats”. The new Hillsdale is basi­cally George W. Bush and Trump — tax and spend, tax and spend, blame the democrats for record deficits.