Today, the Michigan Senate passed House Bill 5570, legislation that suspends the state’s 27 cent per gallon gas tax for six months. This six-month suspension would create a loss of $750 million to the Michigan Transportation Fund. The measure passed the House last week in extreme quick fashion with the announcement coming in the morning and the legislation passing by 4:00 pm the same day.
MITA staff has expressed concern regarding loss of revenues affecting the transportation budget, potentially affecting many projects across the state and the livelihoods of thousands of road worker employees. Through many efforts, the measure seemed to generate enough public support for lawmakers to pass it on to the Governor.
During the passage in the Senate, the bill failed to receive the necessary votes to give it immediate effect. This means that the bill wouldn’t even be put into effect until March of 2023, when the price of gas is highly unknown. Governor Whitmer has indicated that she does not support the proposal and we strongly anticipate a veto from the Governor.
If for some reason the Governor does not veto the legislation, Legislative Republicans have said that they will appropriate the $750 million in lost revenues out of the general fund to the transportation fund. What is even more significant, during the debate several members of the Senate expressed their desire to take a look at the sales tax on fuel and suspending that rather than the excise tax. Michigan is one of seven states that assess sales tax on motor fuel and the only state that doesn’t put any of those revenues towards transportation funds. Eliminating the 6% sales tax on fuel has been a long-standing goal of MITA and there may be an opportunity to have honest debate on that topic over the next several months.
This is another example of the political ping pong match that road funding has been on for decades. This is also a reminder that it is an election year. Unfortunately, these political moves happen all the time and road funding and the gas tax are the current targets.
If you have any questions or concerns, please feel free to contact Rob Coppersmith, Executive Vice President, at firstname.lastname@example.org or Lance Binoniemi, Vice President of Government Relations, at email@example.com. They both can also be reached at 517-347-8336.