ROADS/BRIDGES: Michigan appears ready to increase gas tax

Lawmakers in both House, Senate approve measures to help ailing infrastructure

With cherry pies in high demand in Michigan as the summer kicks into high gear, lawmakers there seem to be on a sudden sugar high when it comes to finding money for the state’s ailing infrastructure.

The Senate gave the nod to a three-year $1.5 billion plan to aid road and bridge work that calls for a gas-tax increase and shifting money over from Michigan’s general fund. In mid-June, the House passed a measure calling for about $1.2 billion to address the issue.

“Michigan’s citizens are demanding action and we are confident that leaders in the House and Senate can work together to resolve any differences and enact a final solution to Michigan’s road-funding crisis before Labor Day,” said Jim Holcomb, general counsel for the Michigan Chamber of Commerce.

The Senate plan calls for a 15-cent (5-cent increments over three years) increase in the state gas tax as well as annually pulling $700 million from the $9.9 billion general fund. The diesel tax will be aligned with the gas tax, future inflationary adjustments will be made after the gas tax hits 34 cent per gallon and hybrid/electric car fees will be increased. Taxpayers also will receive an income tax reduction equal to the amount the general fund increases above inflation.

The House blueprint earmarks $900 million in general funds for road and bridge construction. It matches the Senate’s diesel tax adjustment and the call for hybrid/electric vehicle registration increases, but also calls for a $135 million cut in economic development spending.

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