Michigan drivers won’t see an increase in gas prices at the pump just yet as Gov. Gretchen Whitmer’s proposed 45-cent tax increase has been stalled.
The controversial tax hike made national headlines as it would give Michigan the highest gas taxes in the nation.
Hillsdale College economics professor Charles Steele warns against this tax and its implications for Michiganders.
“The tax would have some pretty negative consequences,” Steele said. “It tends to be pretty regressive, so it hits poorer people harder than anyone else.”
The effects hit especially hard in areas like Hillsdale that are close to other states.
“There will be economic dislocations along the borders,” Steele said. “People in any of the border states will have a tax of about 30 cents a gallon, whereas ours will be over 70 cents.”
The proposal was introduced as a part of Whitmer’s suggested state budget.
The deadline for this year’s budget approval is Oct. 1. If the legislature fails to come up with an approved budget, the state could face a government shutdown.
With this looming deadline in sight, Whitmer announced she will relent on the highly-contested gas tax for the sake of the overall budget.
“We have all agreed to continue conversations about road funding in a meaningful way and table all associated issues for the time being,” Whitmer said in a joint statement with GOP members Senate Majority Leader Mike Shirkey and House Speaker Lee Chatfield. “Right now, our number one priority is getting a budget passed. We look forward to rolling up our sleeves and negotiating on behalf of the people of Michigan.”
With the gas tax sidelined, negotiating and voting on the budget is the main focus for the Michigan legislature in the next two weeks.
Shirkey is a major voice against the tax hike and is advocating for road repairs in the new budget.
“Our budget will include $500 million more for roads, without raising taxes,” Shirkey said in a press release on September 6. “We are building upon the promise we made to taxpayers to find money within our existing budget to fund one of our major priorities: roads.”
Rep. Eric Leutheuser of Hillsdale is working to find a budget both sides will support.
“We had a number of proposals that we presented to the governor behind closed doors this summer,” Leutheuser said. “Some of them were quite significant and showed good faith and would have gone a long way to making the roads a greater priority going forward.”
Whitmer has failed to show interest in any of these proposals from Republican lawmakers.
Leutheuser said he is committed to solving the road issues beyond the 2020 fiscal year budget.
“Not only are we going to show in this budget a real significant investment in the roads, but we are willing to have a conversation after this process is done for a long- term solution,” Leutheuser said. “A long-term solution accounts for the fact that fuel consumption may decline, one that looks at a ballot proposal that dedicates sales tax revenue to roads, maybe one that has some tax relief in the form of lower registration fees”
Republican lawmakers in Michigan are currently working on a budget that can improve roads and appeal to the governor and her party.
Leutheuser wants his constituents and the people of Michigan to know that the lawmakers are looking for the best option.
“The state has had a lot of fiscal discipline with former Governor Snyder,” Leutheuser said. “We’re going to be very careful to make sure we have a fiscally sound budget going forward. We want to keep Michigan on the path of paying down debt and preparing for the future so over time the state becomes a more attractive place to live and raise a family.”