Michigan’s Road Funding Debate: New Proposals on the Horizon
In Michigan, a significant shift in road repair funding could soon emerge from the state House committee, driven by a Republican initiative.
A new plan suggests eliminating the current 6% sales tax on gasoline and substituting it with a higher fuel tax directed entirely at road maintenance. Advocates of the bill assert that this change will not affect the total amount consumers pay at the pump.
The proposed legislation also aims to allocate approximately $2.2 billion from corporate income tax revenue towards road improvements.
Representative Pat Outman (R-Six Lakes), who leads the House Transportation and Infrastructure Committee, intends to incorporate another bill designed to establish a neighborhood road fund. This initiative aims to ensure that smaller, often overlooked streets receive necessary attention.
“It’s a fund specifically for certain streets that might not be federally aid eligible or ones that are most neglected that usually don’t get the adequate resources to it,” Outman explained on Monday.
Outman highlighted that this fund would particularly benefit smaller governmental entities, such as townships, which may not have to match the financial input of county road departments.
Meanwhile, Democratic Governor Gretchen Whitmer is advancing her own road funding strategy.
Governor Whitmer’s proposal also involves channeling gas pump taxes into road repairs, but she additionally seeks increased contributions from large corporations and the marijuana industry.
Despite these efforts, Outman noted that reaching a consensus remains challenging. “The bottom line is the vast majority of her money is generated through new revenue sources. And then the vast majority of ours is through existing revenue and just rather reprioritizing some existing funding,” he stated.
Concerns have been raised about the potential impact on school funding, which heavily relies on sales tax revenue—revenue that would diminish if the gas tax is implemented. To address this, Republicans propose allocating an extra $775 million to the School Aid Fund.
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