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Rebuilding strong middle class neighborhoods was a theme of Detroit Mayor Mike Duggan's State of the City address. Key to that, the mayor said, is reforming Michigan's no-fault insurance system.

"It could happen this year," Duggan mused during his speech.

It should. And the opportunity for doing so is greater with Gov. Gretchen Whitmer's proposal on the table to hike the fuel tax by 45 cents per gallon to fund road repairs.

Whitmer says her tax hike would cost the average motorist $276 a year.

Michigan's no-fault insurance system, with it's unlimited lifetime medical benefits, results in average annual auto insurance premiums of $2,239, according to Insurance.com. That's the highest in the nation, and is $874 above the national average of $1,365. 

Most of the difference is attributed to the upcapped medical benefit.

Reforming no-fault would reduce the cost of auto insurance more than enough to off-set the additional burden of the gasoline tax.

How would that help the cause of rebuilding a strong middle class in Detroit?

A recently released report from Detroit Future City cited high auto insurance rates as a primary barrier to restoring middle class neighborhoods in the city.

Premiums in Detroit average $5,414, according to ZEBRA, a nationwide insurance tracking service. That's nearly twice the statewide average.

And it makes Detroit an expensive choice even for families that are doing OK financially. For a two-vehicle family, an auto insurance bill that closes in on $11,000 annually consumes a disproportionate share of the household income, and makes saving for college and retirement nearly impossible.

The mayor touched on a number of other initiatives aimed at removing opportunity obstacles, including building a more highly skilled workforce, locating jobs closer to where Detroiters live, reducing violent crime and fostering entrepreneurship.

It was a speech aimed at encouraging longtime Detroiters to stick with the city while the mayor works to spread the new-found prosperity of downtown to the neighborhoods. 

Staying in Detroit would be made much easier by substantially bringing down the cost of auto insurance. And it's the quickest fix.  

Duggan has been at this effort for five years, and has been thwarted by lobbying from the health care industry and trial attorneys.

Now, though, he has an ally in Republican state House Speaker Lee Chatfield, and a growing sentiment in the Legislature that the entire state would benefit from bringing down the cost of auto insurance.

Lawmakers also want to fix the roads, though they are reluctant to do so with an unpopular fuel tax hike.

Taking the sting out of the higher gasoline prices with lower auto insurance premiums could be what it takes to get the fuel tax increase passed.

The two issues should be packaged in the Legislature and sold as a means of fixing the roads without draining household budgets.  

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