News Story

Whitmer Gas Tax Hike: Media, Boosters Ignore $600 Million It Moves Out Of Roads

The figures are in governor’s budget proposal

Mainstream media publishers and organizations supporting the $2.5 billion gas tax hike proposed by Gov. Gretchen Whitmer continue to overstate how much of the increase will go to road repairs, given that the governor intends to remove other money from the road budget.

Whitmer’s executive budget recommendation for the fiscal year that begins Oct. 1, 2019, assumes that extra revenue will flow in from her proposed 45-cent per gallon gas tax increase. This would come in three 15-cent installments, the last in October 2020, and is expected to collect $2.5 billion more from motorists annually.

But the budget recommendation only proposes spending an additional $1.9 billion on roads, not $2.5 billion. Meaning that $600 million – or 24 percent of the additional gas tax revenue – will be used to support other forms of state spending, and not, in the governor’s campaign slogan, “fixing the damn roads.”

Yet, ever since Whitmer delivered her proposal to the Legislature on March 5, no one in the media or the state political establishment appears to be listening, including the head of the Michigan Department of Transportation.

Here are some of the published reports that have included the inaccurate figure on road spending:

Michigan Radio

May 29

“The governor’s plan, the beauty of it is that she had said, this is my plan, this is my idea, anybody has a better idea on how to raise the 2.5 billion dollars to fix the roads, put it on the table and let’s have the discussion,” [MDOT Director Paul] Ajegba said.

Detroit Free Press

May 29

“She [Whitmer] has estimated that the fuel tax would raise an extra $2.5 billion. Instead of putting that money through the regular formula under Public Act 51 of 1951, under which most of the road money goes to local road agencies, a greater proportion would be spent on the most heavily traveled roads.”

Small Business Association of Michigan

“Whitmer is not proposing selling bonds as part of the plan. Instead, she is looking at adding to the state's 26.3-cent-a-gallon gas tax without taking off the existing state sales tax on gasoline. Such an increase would raise roughly $2.5 billion for the roads.”

Crain’s Detroit Business

May 29

“Dow Chemical CEO Jim Fitterling, a member of BLM [Business Leaders of Michigan], supports Whitmer’s call for $2.5 billion more annually for roads.

“‘You can’t expect the governor or any administration to try to fix this when the revenue won’t cover it,’ Fitterling said. ‘I don’t think the numbers are unrealistic. It is going to take the kind of money that they’re talking about to get the quality of the roads up to where it needs to be.’”

Hometown Life

May 25

“This was the driving force behind a recent vote by the Livonia Chamber of Commerce Board of Directors to support Gov. Gretchen Whitmer’s gas tax plan to generate $2.5 billion in annual revenue for lasting repairs to Michigan’s crumbling roads and bridges.”

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.