Senate Approves Tax Raise on Fuel

Senate Approves Tax Raise on Fuel

LANSING - The Senate approved a controversial bill that will raise taxes to fund Michigan's roads. 

The bill, HB 5477, would raise fuel taxes to help the government keep up with Michigan's weathering roads, if passed into law. The bill plans to convert the current flat tax on fuel to a whole sale tax. Taxing at a whole sale level will allow the government to gradually raise the percentage each year for four years to match the level of inflation. 

"The idea of that incremental increase is to phase it in so that you're not socked with a much higher bill at the pump all at once," said Jeff Cranson, Director of Communications for the Michigan Department of Transportation. 

Although a recent report by the the American Petroleum Institute found that Michigan had one of the highest fuel tax rates in the country, Cranson said the percentage of that tax that goes towards maintaing roads is one of the country's lowest. 

"It's very much a falsehood to talk about us having one of the highest gas taxes in the country and not point out that that doesn't all go to roads," Cranson said.

The current fuel tax system isn't compatible with the increasing number of people driving fuel efficient cars. 

"We drive more fuel efficient vehicles which is a wonderful thing," he said. "I mean its great for the environment, its great for emissions, its great that we're getting better fuel economy. But, if that's your funding model for the roads you drive on, its not a good thing. Your Prius does as much damage to the road as an F-52 pickup truck." 

If passed, it would take effect on on April 1, 2015.

House Bill 5477 was sponsored by Rep. Rob Verheulen (R-District 54) and Rep. John Walsh (R-District 59). Senate Minority Leader Gretchen Whitmer (D-District 23) applauded the decision which drew a lot of backfire on social media. Neither Verhuelen, Walsh nor Whitmer responded for comment. 

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