Lawmakers look at increasing gas tax

Michigan lawmakers may soon be considering whether to approve a increase in the state’s gasoline and diesel tax. On Tuesday, Pam Byrnes, (D-Chelsea) and Richard Ball (R-Bennington Twp) introduced a three bill package targeting the fuel tax.

Here’s how Peter Luke at MLive.com described the proposal:

Michigan’s per-gallon gas tax would jump from 19 cents to 23 cents this year, and then to 27 cents in 2013, under a measure that seeks to avoid the loss of more than $2 billion in federal highway aid for state and local roads over the next five years.

It also increases the tax rate in diesel fuel from 15 cents a gallon to 21 cents initially and then to 27 cents, also in 2013.

The announcement was the point of an action alert by the County Road Association of Michigan. From their Wednesday alert, here’s how they describe the bills:

House Bill 5768 – Amends the Motor fuel tax act which contains both the gasoline tax and the diesel fuel tax paid by passenger vehicles;
· Increases the gasoline tax by $.04 cents per gallon (.19 to .23) effective March 1, 2010;
· Increases the gasoline tax by $.04 cents per gallon (.23 to .27) effective January 1, 2013;
· Increases the diesel fuel tax by $.06 cents per gallon (.15 to .21) effective March 1, 2010;
· Increases the diesel fuel tax by $.06 cents per gallon (.21 to .27) effective January 1, 2013; and
· Removes language creating ethanol and bio-diesel tax credits.

House Bill 5769 – Amends the Motor carrier fuel tax act which regulates commercial vehicles;
· Increases the diesel fuel tax by $.06 cents per gallon (.15 to .21) effective March 1, 2010; and
· Increases the diesel fuel tax by $.06 cents per gallon (.21 to .27) effective January 1, 2013.

House Bill 5770 – Amends Public Act 51 of 1951;
· Creates the Transportation Investment Fund establishing the method for distribution of the new funding as follows:
· 10 percent off the top to Comprehensive Transportation Fund;
· Remaining revenues are dedicated to a newly formed Transportation Investment Fund within the Michigan Transportation Fund (MTF) and distributed according to the current formula (39.1 percent to counties);
· The purpose of the Transportation Investment Fund is to ensure the new funds are not subject to diversions. The legislation states that collection expenses must be paid from other MTF revenues.
· MDOT will be required to annually compile a complete written accounting of all disbursements from the Transportation Investment Fund. This would be reported to the legislation within 30 days of the end of the fiscal year;
· Creates a five-member Fuel Tax Restructuring Commission to study and recommend long term replacements to the current fuel tax structure.

Former state Rep. Jack Hoogendyk sent out a notice to his list of conservative activists. In his e-mail titled, “Here Comes Another Tax Hike, Led by a “Republican”!”, Hoogendyk opines:

This would place Michigan behind only Hawaii, New York and California in total fuel taxes. Do we need to spend money on improving roads? Perhaps, but why isn’t anyone in Lansing willing to look at the current tax structure and adjust it accordingly to provide the needed road funding. Why do we continue to spend large sums of money out of the transportation budget for public transportation that almost nobody uses? Why do we continue to pay inflated “prevailing wages” on road projects? Why are we not more demanding of better quality construction so that roads aren’t deteriorated before their life expectancy is up?

Um, really?

I did a quick survey of some of the state’s public transportation sites to find out how many “nobody’s” are using public transportation.

The Capitol Area Transportation Authority, the bus service in Lansing, reports 11.3 million rides in 2008, according to the most recent report (pdf) available. And the 2008 report for the Grand Rapids Area Transportation Authority reports in 2008 that business gave more than nine million rides.

The Michigan Department of Transportation has identified 99 urban and non-urban transportation authorities in Michigan.

Kinda hard to believe that 99 transportation authorities are sending buses out around the state for “nobody.”

But really, all this comes down, as Luke notes, to capturing federal cash for for our cash strapped MDOT to repair of pot hole riddled and decaying transportation infrastructure. Funding formulas from the feds require states to match cash (it varies based on the projects and requests the feds decide to fund). With the state facing over a billion dollars in deficit for the coming budget year, doesn’t it make some iota of sense to leverage state cash for federal cash?