News Story

Motorists Already Doing More For Roads Without Another Tax Hike

'Nothing?' Drivers paying $298 million more gas tax + $226 million more license plate tax in 2020

In a recent WKAR broadcast, reporter Jonathan Oosting of Bridge Magazine said this about efforts to spend more on Michigan roads:

— “Everybody knows some level of new revenue is gonna to be required here. I think Republicans know as well.”

— “If you are not fixing roads, they get more expensive to fix. ... The longer you don’t do anything, the harder it is to do.”

In August, MLive produced a video about Michigan’s roads. The news site’s Emily Bingham said in the video, “Bottom line, there’s a steep price to pay if you do nothing.”

The consensus of Michigan’s media establishment is that not raising tax rates is “doing nothing” to increase state spending on road repairs.

But Michigan taxpayers are doing something about the state’s roads.

In 2015, the Legislature increased vehicle registration taxes, starting in 2017. That tax increase was projected to cost vehicle owners at least $226 million more in additional payments to the state this year.

Also in 2015, a motor fuel tax increase was imposed: 7.3 cents more per gallon for gasoline and 11.3 cents more for diesel. This is projected to cost motorists an additional $298 million this year.

Part of the legislative compromise that gained a majority for those tax increases was to allocate some of the future growth in state income tax revenue to roads. In 2019 the Legislature allocated $468 million from this tax for road repairs from the state General Fund.

Generally, money for Michigan roads passes through a state Transportation Fund, which is where revenue from the gas tax and vehicle registration tax goes. Transportation Fund revenue have grown from the equivalent of $2.3 billion current dollars in the 2011-12 fiscal year to $3.6 billion in the 2019-20 fiscal year, a 57% rise over eight years after being adjusted for inflation.

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.