It's not just California: Michigan wants to raise the gas tax, too
California isn't the only one taking aim at the pumps in an effort to raise state revenue. The Michigan state legislature is also proposing a hike in its gas tax that could potentially make its gas taxes the highest in the nation. The current nineteen cent per gallon tax on gas, and fifteen cent per gallon tax on diesel, would be replaced by a simple 18% tax on the wholesale prices of both. Michigan says that the state isn't earning enough now that people are driving less, and driving more fuel efficient cars.
The reasons in for the tax are the same in MI as they are in CA: the transportation sector and road funding are sorely inadequate. Michigan has legendarily bad roads -- not the worst in the nation, but close in some cases. The oil and gas station lobby, however, wants none of it. One oil company exec said, "Cheap fuel prices are fueling the (economic) activity we have now. Taxing gasoline to fix roads is an old way of doing it." They are also worried that when gas prices inevitably go back up, the tax will make pump prices exorbitant.
A Michigan transportation rep said "We didn't necessarily see memos coming out from them when the price of fuel exceeded $4 a gallon." He also said that the tax is capped in the first couple of years, so no one needs to be concerned. The measure, along with a rise in DMV registration fees, is expected to raise $1.5 billion per year. If it doesn't pass this year, the legislature is expected to resurrect it next year. Hat tip to Braggin Dragon!
[Source: Michigan Live]
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Reader Comments (Page 1 of 3)
iCameiSawiConquered 6:22PM (12/28/2008)
Does anyone have an alternative means of funding transport upkeep?
I mean really, does money grow on trees? Do people work for free? Just how exactly does a public service, which roads are believe it or not, get paid for? And how does it get paid for with a tax level that hasn't changed in over 15 years in many of these states?
You can't have your cake and eat it too. It's either pot hole infested roads, collapsing bridges, terrible public transportation services while keeping the taxes low....or raising revenue to pay for the good transport services people expect and should have.
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Sandok 6:42PM (12/28/2008)
Sorta like in Europe... Hmmm...
tankd0g 6:47PM (12/28/2008)
It's already happening, privatized toll roads and bridges. Welcome to the "free" market economy.
Epyx 6:49PM (12/28/2008)
Icame,
I agree that roads are a public service and must be funded but I disagree that the revenue source must be higher gas taxes. I would start by freeing up funding from areas that gov does not belong. Prioritize spending.
In PA one of the most disgustingly fat and wasteful spending is on government itself. Our legislature is obnoxiously oversize. Before any new tax is placed on resident every spending reduction possible must be made.
Maybe we just reduce military spending by 1/4 and distribute that revenue to the states. Anything is better than the simplistic answer of more taxes.
I want creative public servants that look for new answers, not just going to the well for more taxes.
How long would a business stay running if the answer to every income problem was "just raise prices."
Toledo Guy 7:09PM (12/28/2008)
More taxes are not the answer to road funding problems. Responsible government is. The current recession hit Michigan before the rest of the country. Yet Gov. Jennifer "Two Penny Jenny" Granholm has increased overall state spending every year that she has been in office. I'll even go so far as to say that Michigan's infrastructure is OVERbuilt. It ain't 1970 in Michigan anymore.
Just south of the line here in Toledo, our city government had money this spring for flowerbeds and new "Toledo Pride" signs at every entry point to the city. Yet this winter there's not enough money to buy road salt. Where are the priorities?
Until government goes thru the same belt tightening that you and I do in hard times, I won't support any new taxes.
CarbonBlack 8:38PM (12/28/2008)
The federal govt. thinks money grows on trees!
Sea Urchin 9:06PM (12/28/2008)
Well people buy gas with one purpose alone......drive.............people drive on roads. As simple as that. If you want roads, you get that money from gas tax.
NIck 4:16AM (12/29/2008)
The state should go after dad beat dads and sluts who have children and can't afford to have them. Get rid of welfare.
Nolan 4:44AM (12/29/2008)
"And how does it get paid for with a tax level that hasn't changed in over 15 years in many of these states?"
Your ignorance is palpable. Do you realize the beauty of a tax by percentage? Lets put it into real words and numbers so you, and anyone else who doesn't get percentages can figure it out.
example a: In 1970 someone buys a candy bar at $0.25. The cost of goods and services to make/advertise/distribute/support the candy bar costs less than $0.25 cents. In 2010 someone buys a candy bar at $1.00. The cost to make/advertise/distribute/support the candy bar has increased 4 times since 1970 so in order for a company to afford to sell it, they must charge $1.00.
example b: In 1970 gas costs $1.10. Of that $1.10 10% is taxed by the government. This means that for every gallon of gasoline purchased, the government gets $0.10 to use for the road. Now here is where the beauty of a percentage comes in. In 2000, gas costs $4.40. The government gets $0.40 now to use for the road!!!! MY GOD, what on earth is the tax rate?! Since you can lead a horse to water.... I'll answer. Its still only 10%.
Valid arguments to my post: But cars get farther on the same gallon of gas now, than they used to. I would counter with, no they don't, however suppose they do. My real counter argument would be as follows. I would wager road technology as it applies to the cost of building/supporting roads, has inversely changed with changes in cars mpg's. In lamens, cars get more mpgs now, and roads are cheaper now relatively speaking.
Invalid arguments to my post: You spelled something wrong, therefore you are wrong. Your grammer is wrong, therefore you are wrong. I'm telling you this, because you are wasting time/energy (killing our planet if that helps you get it) by responding. I won't be back to read it anyway. (Ok I lied, I'm egotistical enough to check back.)
Congrats on making it this far, I just had to rant, because I hate when people don't get math, and try and argue a point with misunderstood gradeschool concepts.
-Nolan
Mike 10:17AM (12/29/2008)
We are due for a tax increase: the federal gas tax has not been raised since 1993 and is not rate-locked to inflation...but I'm sure all the whiny fairies replying to this post knew that already.
With hybrids, electrics and green diesel becoming more common the solution is going to be a combo of a sliding gas tax to be more inline with the cost of infrastructure maintenance and a federal vehicle registration tax (to link infrastructure funding with the number of vehicles on the road). Call your congressman.
luke 6:23PM (12/28/2008)
Why did they separate the chart at 48.6 instead of 50, making NC red?
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Jake B 6:33PM (12/28/2008)
The glory of low Alaska gas taxes. Too bad we get reamed at the pump still, 2.47 a gallon.
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Dave T 6:43PM (12/28/2008)
So they wanted to raise gas taxes before in order to curb driving and emissions, and to encourage people to buy more fuel efficient vehicles, and now that people are driving less, and driving smaller more fuel efficient vehicles, they say that they have to raise taxes higher because *they* aren't making enough money!
Perhaps Michigan needs to look at ways to cut spending instead of increase funding. They spent a total of 46.1 Billion USD in 2007, while their neighbors to the south, Indiana, spent only 12.2 Billion USD.
To make that comparable, the state of Indiana spends about $2,000 per resident while the state of Michigan spends over twice as much, $4600 per resident. I doubt the people of Michigan are getting their money's worth.
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Michael 7:45PM (12/28/2008)
Raise gas taxes and convince people to buy new, more fuel efficient vehicles with the money they don't have anymore...
Frank 9:47AM (12/29/2008)
Same thing as the cigarrette tax Date T. They raise the tax on a pack of cigs to provide health care for, are you ready for it? "The children". Then people say "the hell with this, I'm gonna quit smoking!". Tax revenue goes down and the the government says "oh no, how are we gonna fund health care for 'the children'"? I am not a smoker, but the lunacy of government tax policy knows no bounds.
JMC3 6:45PM (12/28/2008)
You'll see nationwide gas tax rise take place post Jan 20th.
Obama has already hinted at His agenda which will cost money and He'll get it using a variety of reasons for new gas taxes.
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Epyx 6:52PM (12/28/2008)
It is not a tax - it's a fee!
And it is not a lie if you believe it!
ambientFLIER 7:04PM (12/28/2008)
I'm absolutely fine with paying a gas tax for the good of the nation. While $1.50 a gallon is great for your wallet, it's way way too little to pay for gas. This low price won't force soccer moms to trade in the trucks and suv's and to get a, fuel-efficient vehicle, and it won't help the states get their budgets straight. I say add at least a $1 tax per gallon.
When you think about it, how is it possible to sell gas for so cheap? Water costs more than that a gallon, and it's plentiful and does not need much refinement. How can the cost of finding a drill site, drilling, pumping, refining, transporting, etc, work out to $1.50 a gallon?
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Toledo Guy 7:12PM (12/28/2008)
Hey do us all a favor, would ya? Every time you buy gas, send the feds a check for your suggested $1.00/gallon. If its such a grand idea, lets make it voluntary. You go first.
FordTruckin 7:36PM (12/28/2008)
lol
Voluntary gas tax...sounds brilliant. Yet for some reason I feel that the total would only be a few hundred dollars (80% of which would be Al Gore writing a check on TV for goof PR).
As a resident in Michigan, I can't wait to see Granholm out...2 more years. Hopefully when I graduate from college (2011/2012) we will see some progress.