Whitmer vetoes bill suspending Michigan's 27-cent-per-gallon fuel tax
Lansing — Gov. Gretchen Whitmer on Friday vetoed legislation that would suspend for six months Michigan's 27-cent-per-gallon excise tax on fuel.
The Democratic governor signaled last month that she would veto the Republican-backed legislation but waited until Friday afternoon to put pen to paper.
In a letter last month, Whitmer noted that because the bill's effective date would be delayed until 2023, the "misguided proposal does nothing for Michiganders facing pain at the pump right now." She also argued the bill would hinder road work projects since proceeds from the fuel tax go toward road and bridge repairs.
Republican lawmakers advanced the gas tax suspension last month as gas prices climbed due to inflation and sanctions related to Russia's invasion of Ukraine. As of Friday, the state's average price per gallon of gasoline was $4.07, up from the average a month ago of $3.57 a gallon, according to AAA data.
Republicans estimated a suspension of the 27-cent-per-gallon gas tax between April 1 and Sept. 30 would result in a revenue loss of between $725 million and $750 million, which could be backfilled with general fund surplus. A Senate Fiscal Agency analysis estimated the tax suspension would save the average driver about $75 over six months based on driving habits from 2019.
The bill passed through both the House and Senate in the space of a week, but was unable to get a two-thirds majority in the Senate needed for immediate effect, pushing the effective date to 90 days after the end of session or around March 2023. Most Democratic lawmakers withheld their votes for immediate effect.
Sen. Michael MacDonald, R-Macomb Township, criticized the governor's veto Friday and indicated it was part of a trend of vetoes cancelling out tax relief. He was referring to the governor's veto last month of a $2.5 billion tax relief plan advanced by Republican lawmakers.
"People need this relief now and we have the surplus revenues available to provide it while still supporting critical services and fixing the roads," he said.
Whitmer has voiced support for a separate gas tax relief plan that would suspend the 6% sales tax on gasoline — saving drivers about 24 cents per gallon on a $4 gallon of gas. She also has asked the federal government to suspend its 18-cent-per-gallon fuel tax.
The proceeds from the 6% sales tax largely go to the School Aid Fund but proponents of the plan have said school budgets would be held harmless due to higher than expected revenue in the first six months of the fiscal year.
House Republican leadership have opposed the sales tax plan because driver savings would fluctuate up and down based on the cost of gasoline, whereas the suspension of the 27-cent-per-gallon excise tax on fuel would be a guaranteed rate of savings.
Staff writer Craig Mauger contributed.