June 19, 2014 at 1:00 am


Be honest about where gas taxes go

Travelers who leave the state for summer vacations will notice two things: roads will be smoother almost everywhere they go, and gasoline prices will be roughly the same as they are back home.

Those two observations will tug at each other as Michiganians weigh whether they’re willing to dig deeper into their pockets to fix what most will come home convinced are the worst roads in the nation.

They’ve been told they pay the lowest per-capita fuel taxes of any state, and that’s why their highways are so awful. But if that’s true — and technically it is — they’re bound to wonder why a gallon of gasoline is no cheaper in Traverse City than it is in Gatlinburg.

Simple reason: Along with 19 cents in true fuel taxes, Michigan motorists pay the 6 percent sales tax on gasoline purchases. The sales tax raises roughly $1.2 billion a year — nearly the amount Gov. Rick Snyder says is needed to smooth our roads and keep them that way. But none of the sales tax dollars go to fixing roads. Instead, the money is split between schools and the general fund.

Michigan is among the bottom 10 states in general fund support for highways. While other states subsidize fuel taxes to fund road work, until a year ago Michigan rarely tapped its general fund for highway spending, though over the past 12 months, the governor and Legislature have diverted nearly $1 billion in emergency funding for road repairs.

A sustainable revenue stream has evaded lawmakers, who adjourned for their summer vacation last week without cracking the road funding nut. Don’t expect them to do so until after the November election, when lame duck lawmakers may find more courage.

Senate Majority Leader Randy Richardville, who tried a dozen different paths to raising road revenue, says lawmakers aren’t likely to return to Lansing to take up the issue again this summer, nor will they vote when they resume the session in September.

“I can’t see them voting for a tax increase a month and a half before the election,” Richardville says. “If it happens, it will be in lame duck.”

Richardville says the proposal most likely to pass would replace the sales tax on fuel with a 19 cent excise tax that rises annually with construction inflation and is solely dedicated to the roads.

That would require a replacement for the money lost to schools and the general fund — unless lawmakers are willing to find $1 billion or so in spending cuts elsewhere.

Richardville thinks the answer is a 1 cent sales tax hike, an idea that was defeated last week.

Since it requires a constitutional revision, two-thirds of lawmakers will have to vote yes.

Getting them to do so without trying to leverage their votes for other things on their wish list, as Democrats did last week in demanding a bigger homestead tax break, will be a monumental challenge. Getting public buy-in for a sales tax hike will be even tougher

But if motorists knew that every dime they pay in taxes at the pump is going into potholes, they might be willing to support a replacement tax for education — or better yet, they might force lawmakers to find the money, say, in the bloated prison and welfare budgets.

Follow Nolan Finley at detroitnews.com/finley, on Twitter at @nolanfinleydn, on Facebook at nolanfinleydetnews.
Watch him at 7:30 p.m. Thursdays on "MiWeek" on Detroit Public TV, Channel 56.