News Story

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

Following a report that estimates Michigan taxpayers have paid for $1.7 billion in road improvements in other states over the past 50 years, State Sen. Wayne Kuipers said it's time the state got payback.

Kuipers, R-Holland, said he will soon introduce controversial legislation that would have Michigan keep federal gas tax dollars and only pay Washington a penny on every dollar collected.

Michigan has long been a "donor" state with regards to the federal gas tax. That means it has always paid the federal government more in gas tax than it received back in federal highway funding. According to the Tax Foundation, Michigan has received about 92 cents on every dollar it has given from 1956 to 2005. But during that same span, Alaska has received $6.66 for every dollar, Washington D.C. $4.11 and Hawaii $3.16.

Kuipers said his legislation would require every agency in Michigan that collects the federal gas tax and submits it to Washington to submit it to Michigan instead.

"Then we will submit it to Washington a penny on the dollar," Kuipers said. "We'll see if it flies."

It's unclear if the federal government could prosecute over it.

"They might," Kuipers said. "There are some unanswered questions here. If we don't come up with an alternative approach, we are going to be cooked. I want to raise awareness at the federal level. The way the program is set up is not right. States are crumbling under these federal programs and it is not right."

There is another proposed bill that has been introduced that would increase the gas tax four cents in 2010 and four cents in 2013. That would help raise the $84 million the state needs to qualify for $475 million in federal aid, said Keith Ledbetter, director of legislative affairs for the Michigan Infrastructure and Transportation Association.

Ledbetter called Kuipers' bill "a public relations move."

"There is no legitimacy in law to do that," Ledbetter said. "It's not his money to keep. It would be akin to Oakland County saying, 'We pay more in taxes than other counties so we aren't going to give it to the state.' You'd have troops march on that area and say, 'That's not how it works.'"

According to the Coalition for Donor State Equity, Michigan is the 23rd worst state in terms of return on their contributions at 92.1 cents on a dollar.

The coalition said that since 1956, Michigan has given $1.7 billion dollars that have been used to improve roads in other states.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.