Governor Whitmer Wants A 45 Cent Per Gallon Gas Tax Increase
Governor Whitmer will present her first executive budget and it sounds like there will be quite a bit of spending in it. One of her big ticket items is increasing Michigan’s gas tax just 2 years after it was raised. That increase made Michigan the 6th most expensive state to buy fuel.
On January 1, 2017 Michigan’s gas tax was raised from 19 cents to 26.3 cents per gallon and diesel fuel was raised from 15 cents to 26.3 per gallon. That increase in gas and diesel fuel tax was accompanied with a 20% increase in registration fees on all cars and trucks. This 45 cents per gallon increase that Governor Whitmer is requesting would raise our state gas tax from 26.3 cents per gallon to a whopping 71.3 cents per gallon. This increase would rocket us to the top of the heap as the most expensive gas taxed state in the country.
The 45-cent-per-gallon increase in our state’s fuel tax would be phased in over a one-year period with the first 15-cent increase taking effect Oct. 1, with another 15-cent hike on April 1, 2020, and the third increase on Oct. 1, 2020.
This increase of gas tax would generate approximately $2 billion a year in additional taxes for roads and would as stated above fuel Michigan to rocket up to the top as the most expensive state in the country for gasoline tax. We must also remember that there is also a hidden fuel tax which comes via the fact that our gasoline is also taxed at the 6% Michigan sales tax.
During an interview on WDIV TV Governor Whitmer stated:
The fact of the matter is that word (taxes) has been vilified, and it’s destructive to a conversation…We have to talk about investing in ourselves. If we want anyone to come and invest in Michigan, we’ve got to invest in ourselves.
This extreme increase in our gas tax will fund the state’s Department of Transportation with $1.5 billion for state roads, keep in mind our gas taxes and fee increase from the 2015 increase was approximated to bring in an additional $1.2 billion a year which would bring the total to $3.2 billion a year in gas tax and fee increases per year. Governor Whitmer stated that the additional increases will help fund the improvements to local roads. If I am understanding this correctly that will bring the additional taxes for local roads to $1.7 billion per year.
Michigan Economic Development Corporation President and CEO Doug Rothwell was quoted in a Detroit News article stating:
Business Leaders for Michigan is not an organization that likes to talk about raising taxes…But we’re on record saying we need to make significant increases in investment, and we believe user fees — which could be a gas tax — is the best and fairest way to do it.
This increase if passed would certainly bring a huge burden on Michigan citizens. If you fill up your vehicle to the tune of 20 gallons per week this increase would cost you approximately $500.00 per year.
Can this increase pass as requested, we will see. There is one thing for sure, Michigan's gas tax will be increasing substantially once again no matter what the number they agree upon will be.
Will this increase and we hope corresponding fixes to our “damn roads” just help Michiganders to have a less bumpy ride on their move out of Michigan?