A news service for the people of Michigan from the Mackinac Center for Public Policy

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Populist 'Free Gas' Bill Comes At A High Cost

Democrat's voucher plan would cost taxpayers $304 million

State Representative George Darany would like to give every Michigan resident making $100,000 or less a state subsidy to help cover the cost of gas.

Darany, a Democrat from Dearborn, introduced House Bill 5476 in March. According to Michigan Votes, the bill would “give individuals with annual incomes below $50,000 a per-vehicle fuel subsidy of $100, payable in the form of a ‘refundable’ state income tax credit. A $75 per vehicle subsidy could be claimed by those with incomes between $50,000 and $75,000, and a $50 per vehicle subsidy for incomes between $75,000 and $100,000.”

Gas paid by their fellow taxpayers is sure to be popular among residents angry as prices rise to more than $4 a gallon. However, Darany left out one important fact: How much it will cost?

Darany’s office didn’t respond to a request for comment on how much the bill would cost.

James Hohman, fiscal policy analyst with the Mackinac Center for Public Policy, used U.S. Census Bureau data and the state’s latest individual income tax report for income distribution to come up with a cost estimate of $304 million.

“That is a major cost to the state,” Hohman said. “That is about as much money as we turn over to the community colleges every year.”

Jack McHugh, legislative analyst for the Mackinac Center, said until such bills give a cost and how they will be paid, they shouldn’t be taken too seriously.

McHugh said such bills pop up all the time and are bipartisan.

“The fact that the bill makes no attempt to identify a funding source exposes it as an unserious act of pure political pandering,” McHugh said in an email.

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See also:

Nation’s Highest Gas Tax Coming To Michigan?

Motorists Paying for Bike Paths, Museums

Road Rage: Keeping More of Michigan's Gas Tax Dollars at Home

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