LANSING – Sen. John Proos introduced legislation Thursday that would help the state fix and maintain its roads and highways by ensuring non-restricted gasoline and diesel tax revenue is directed into a fund which can only be used for transportation projects.
“Maintaining our roads and bridges is vital to growing commerce, building a good quality of life and attracting tourists to Michigan,” said Proos, R-St. Joseph. “While safety is number one, this is also about jobs. As a border community southwest Michigan is keenly aware of the condition of Michigan’s road compared to neighboring states. To compete for jobs in an economy dependent on the movement of goods, improving our roads is critical to attract job providers to Michigan.”
Proos added: “This is not a gas tax increase. My bill would require that motor fuel funds which are not already constitutionally directed must be put toward building and fixing our state roads.”
Motor fuel in Michigan is currently taxed in three ways. First is the Federal Excise Tax, which is 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel. Second is the Michigan Motor Fuel Tax at 19 cents per gallon for gas and 15 cents per gallon for diesel. Revenue from both of these taxes is restricted to transportation.
More than 80 percent of revenue from applying the 6 percent sales tax to the wholesale price is constitutionally earmarked. The remaining dollars go to the state General Fund to be used as necessary. Senate Bill 351 would direct those remaining funds to the state Trunkline Fund, which is used to generate federal transportation matching funds to build and maintain state highways.
“Using recent House Fiscal Agency estimates, if this reform had been in effect this year, it would have dedicated $83 million more to fix our roads,” Proos said. “With a federal matching rate of roughly 4 to 1, that would actually mean more than $330 million to maintain our state roads.”