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Nearby states raise gas tax as Whitmer road plan idles

By Admin


Washington — Gov. Gretchen Whitmer so far has been unsuccessful in her bid to increase the state’s gas tax to help fix crumbling roads, but several states, including nearby Ohio and Illinois, hiked their fuel levies this week.

Michigan drivers currently pay 26.3 cents per gallon in motor fuel taxes, plus another 16.18 cents per gallon in state sales taxes and an environment regulation fee for a total of 42.48 cents per gallon. Drivers in all states pay an additional 18.4 cents per gallon to the federal government in the form of a national gas tax.

A 10.5-cent per gallon gas tax increase in Ohio took effect July 1, bringing total state taxes at the pump to 38.51 cents, according to the American Petroleum Institute. Illinois hiked its gas tax 19 cents per gallon on July 1, bringing its total to 54.98 cents per gallon.

Drivers in California, South Carolina and Tennessee also started paying higher gas taxes this week, with those states rising 5.6 cents, 2 cents and 1 cent per gallon, respectively. With that increase, California drivers will now pay 61.2 cents per gallon in state taxes, the highest in the nation.

Whitmer, who campaigned on a pledge to “fix the damn roads,” ran into opposition for proposing a 45-cent-per-gallon fuel tax increase to help pay for road improvements in Michigan. That would bring total state gas taxes to 87.48 cents per gallon, leapfrogging California.

The governor has continued to push forward despite resistance.

“A west Michigander sent my office chunks from the deteriorating road outside his home. It’s time to stop cutting corners and #FTDR the right way the first time,” Whitmer tweeted Tuesday, referencing her ubiquitous campaign slogan.

Whitmer’s office did not immediately respond to a request for comment.

Jeff Cranson, a spokesman for the Michigan Department of Transportation, said money from the federal government typically covers about 67% of Michigan’s road and bridge programs. The Michigan gas tax brings in about $1.1 billion, with a separate tax on diesel fuel bringing another $215 million. Vehicle registrations bring in another $1.2 billion that is also used to bolster the state transportation fund.

Cranson noted that state’s gas tax take is split three ways: 39% goes to state and federal highways; 39% goes to counties; and 22% goes to municipalities.

Michigan expects to receive $1.2 billion from the federal government this year for road and transit funding, which will be shared with local municipalities. The Michigan Department of Transportation will keep $911 million and local governments will get $304 million.

Part of the reason that state highway departments are hurting is because the federal government has not increased the national gas tax since 1993. The other problem is cars are much more fuel-efficient than they were nearly three decades ago. That may be good for the environment, but bad for infrastructure funding, because governments collect less when a gallon of fuel takes drivers farther down the road.

Federal money is doled out by the U.S. Department of Transportation’s Highway Trust Fund, which has to be renewed each time the law known in Washington as the highway bill is set to expire. A five-year, $305 billion transportation funding law signed by former President Barack Obama in 2015 that distributes money collected at fuel pumps by the federal government is set to expire in 2020.

Infrastructure supporters in Washington say the federal gas tax should be increased from the current 18.4 cents to about 33 cents per gallon to adjust for inflation.

President Donald Trump and Democratic leaders have agreed on the idea of passing a $2 trillion infrastructure bill, but neither side has signed off on a way to pay for it.

Lloyd Brown, director of communications and marketing at the American Association of State Highway Officials, which represents state transportation departments, said state governments still rely heavily on federal infrastructure money.

“The national highway system has always been a partnership between the states and the federal government,” Brown said. “States have clearly seen a need and they’ve stepped up to increase funding. Now it’s time for the federal government to step up to preserve that partnership.”

Greg Regan, Secretary-Treasurer of the AFL-CIO’s Transportation Trades Department, said the movement by states to increase their own gas taxes shows there is a critical need.

“People are willing to raise their own gas taxes because they know what it goes to,” Regan said. “They’re willing to pay for improvements to their roads and transit. The federal government is lagging behind on this.”

But that bipartisan support for gas tax increases eluded the Whitmer administration when it pushed its proposed 45-cent increase earlier this year.

Michigan’s take at the pump includes a 6% sales taxes on gas purchases, but that money doesn’t currently pay for road improvements. Revenue from the sales tax, which generates about $540 million annually, goes mostly to the state’s School Aid Fund. Republicans in the Michigan statehouse have proposed diverting that money to roads as an alternative to Whitmer’s gas-tax hike.

A $1.2 billion proposal from House Democrats would raise the state’s corporate tax, create a new 6-cents-a-mile tax for heavy trucks and charge bridge tolls to tractor-trailers.

But at this point, neither has a clear path forward.