Michigan governor supports change in gas tax for roads
As if Michigan doesn't have enough problems, the state's roads are generally acknowledged to be the among the worst, if not the worst in the United States. Even Governor Jennifer Granholm this week admitted that the pavement in Michigan is "the pits." There are of course numerous reasons for that, including the weather (freeze thaw cycles), excessively heavy 82-ton truck weight limits and outright poor construction techniques. Another contributing factor is lack of funds.
The state currently has a fixed, 19 cent per gallon tax on gasoline and 15 cents on gallons of diesel. These funds are used primarily for road construction. Unfortunately, when fuel prices climb, the tax revenues don't, even though the cost of building roads and bridges is going up. Granholm last week supported a new fuel tax system that would be changed to a percentage rate.
One of the byproducts of Michigan's poor roads is that it discourages the use of smaller cars since they are more susceptible to damage. Changing to a new tax system would potentially raise revenues for road building, as well as encourage the use of more efficient vehicles. Of course a widescale move to EVs will mean yet another change in the road funding process, but that's another story.
[Source: Mlive.com]
Reader Comments (Page 1 of 1)
jharlan 12:19PM (3/09/2009)
It would be better to index it to the cost of living, because it's a very bad precedent to allow government to put into place a system that gives them greater revenues (which they are allowed to manipulate) tied to a volatile commodity like fuel. I know, some of you people have never seen a tax you didn't like, but some of us wake up every morning in the real world, and have to consider the unintended consequences of our government's actions.
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GoodCheer 8:51PM (3/09/2009)
Wow, jharlan... I absolutely agree with you (let's note the occasion).
I don't think that government would try to drive up the price of gas to increase revenue, but I do think that tax tied to inflation would partially decouple changes in the cost of (internationally traded) barrels of oil from the cost of (regionally / locally priced) gallons of gas. If oil doubled, but oil only accounted for half of the price of gas, then gas would only go up by 33%.
This effect is part of why the Europeans didn't crap their collective pants last summer.
John 11:54AM (3/09/2009)
That's the only thing in Granholm's vocabulary: Raise Taxes.
I was hoping when Obama was elected he would choose her for a cabinet position and we could finally say farewell to this inept Governor.
Unfortunately for everyone in Michigan, even Obama doesn't want her.
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Brn 12:39PM (3/09/2009)
I don't understand why people don't expect gas taxes to rise at the same level as inflation. I'm fine with reasonable increases, I just don't buy into finding new ways to tax (this per mile thing).
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Prinn 10:04PM (3/09/2009)
how about determining what road conditions are acceptable to the public, then basing gasoline taxes on the cost required to maintain the roads at that level?
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Ken 1:36PM (3/09/2009)
I am all for an increase in fuel taxes going toward repairing roads. Also, increasing fuel taxes encourages more fuel efficient vehicles and reduction in pollutants. Increased funds can be used for the building of public transportation systems such as new high speed trains. Maybe we can even substantially increase fuel prices and rebate the surplus back too consumers in other tax reductions to make positive changes in consumption behaviors.
Here though is another stupid politician with a ridiculous idea. Why make gas prices even more volatile? If gas taxes are a percent rather than a fixed rate, sharp increases due to rapidly changing market conditions (such as panics related to world events that do not even effect the price of fuel like 9-11) will just lead to even sharper temporary increases and wider fluctuations in tax revenues.
Just increase the existing tax considerably and index it for inflation. Don't play games with the system.
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Bill 5:10PM (3/09/2009)
Light passenger vehicles aren't the ones causing the damage.
Tax commercial vehicles by weight and mileage driven, since they're the ones tearing up the roads and bridges.
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Jules 10:19AM (3/10/2009)
Want the "real" reason the roads are a mess in and around Detroit? Just sit at a light and watch the city workers fill a pothole sometime. The guy shovels hot blacktop into a hole, pats it once and moves on to the next one. And he's getting paid, what? $36 an hour? They don't even try to do it the right way - with that sort of "why bother" attitude, it's little wonder the roads are a nightmare up there.
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bob 4:14PM (3/10/2009)
Why not build better roads that can accommodate large(r) commercial vehicles (one large truck is more efficient than many smaller ones) and the weather? Why not heat the roads in winter so they don't need to be plowed causing more potholes? Could be done with wind or solar power.
Whenever I go from Michigan into ohio or vise versa you can tell instantly when the border is crossed and I'm pretty sure the weather is the same there. I would be in favor of a little bit of a tax increase if the roads are made better not if they use the same stuff as they are using now.
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Cynical Synapse 1:36PM (3/27/2009)
MDOT spends a lot of money on questionable projects, like replacing perfectly good signs, the so-called Intelligent Traffic System (ITS) that gives us variable message signs that rarely have worthwhile messages, Damage to roads could also be reduced by restricting the weight of trucks on Michigan's roads.
Gov. Granholm's most egregious element of changing the gas tax from a fixed rate to a percentage is the impact on ordinary folk. As unemployment in Michigan rises, ordinary folks cannot afford a tax based on the price of gasoline.
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Todd Schanz 2:20PM (4/05/2009)
The statement that "when fuel prices climb, the tax revenues don't," is a boldface lie. Michigan charges sales tax on fuel so that when gas went to $4.00 a gallon last year, Michigan raked in a whole lot of extra cash. Where did that money go? Not for the roads you can bet.
Also not all the money that comes from gas tax revenue is put back into roads. I believe that I heard a figure that 40 to 50% is taken and put into the general fund.
Stop the lies and fix the roads and NO GAS TAX INCREASE!
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