• Dec 28, 2008
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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  • 36 Comments
      • 6 Years Ago
      Nolan, if you so concerned with math you would think yours would be correct. 10% of $1.10 is not $.10. Also, thanks for explaining why a flat tax makes so much sense...
      • 6 Years Ago
      If this tax would only be for gasoline, and would essentially put clean diesel and hybrids on an even playing field, I'm all for it.
      • 6 Years Ago
      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.

        • 6 Years Ago
        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."
        • 6 Years Ago
        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.
        • 6 Years Ago
        The federal govt. thinks money grows on trees!
        • 6 Years Ago
        Sorta like in Europe... Hmmm...
        • 6 Years Ago
        The state should go after dad beat dads and sluts who have children and can't afford to have them. Get rid of welfare.
        • 6 Years Ago
        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.
      • 6 Years Ago
      I have such a problem with the state of Michigan when it comes to taxation. Michigan State government is stating that they need more money to have better roads. The question I have is then why is it that Ohio has better roads and better road service in general. The minute you cross into Ohio from Michigan the roads are infinitely better. Yet somehow Ohio is able to do this with less money from Gas tax which is supposed to be spent on these services (road upkeep, development, etc.)

      I am a Michigan resident and I seriously cannot take this tax happy state anymore. Just to give you an example of how bad the roads are here. I live in a county that recently stated (at the start of winter) that they do not have the funding to continue salting/plowing roads. Any road has been denoted as a certain level 1 - 3. Level 1 roads (high traffic main roads or freeways) will have salting/plowing to keep them clean as soon as it is safe to do so. Level 2 roads will only get one single path per side plowed/salted. Level 3 roads will be taken care of whenever it is safe and not within overtime. Because of this, 3 separate roads on my way to work were a solid sheet of ice with no signs of being taken care of. Now because of the lack of attention those roads received the potholes can engulf a single car. My question then to the State of Michigan is how then can Ohio (which is only about 20 miles south of me) have roads that are significantly better quality and better snow removal than Michigan? Yet they do this with less tax money.

      I understand that Michigan also allows greater weight per axle of any state to help promote the manufacturing sector that we previously held in this state. However, as this state goes down the tubes why not repeal that law and enforce the axle tonnage similar to other states? Maybe that will help our roads instead of more money out of my pocket getting paid to a road commission that can't even salt and plow my road.
      • 6 Years Ago
      iCameiSawiConquered:

      My big problem with increased taxes and "user fees" and such is that there seems to be little actual accountability in most cases for where the money goes and what it's being spent on. For example, here's an anecdote of an experience I had when I was in (public) high school in CA a few years ago... It speaks to education spending, not gas taxes and transportation infrastructure, but it's still a government institution, and it operates exactly the same way, I'm sure. Anyhow.

      I had to go to the district office for a project that I was working on. When I walked in, I noticed that the receptionist and the few offices that I could see into all had large (19-20") LCD monitors. Now, this was a number of years ago, and at that time a sizable LCD like that was a solid $1000+ monitor. At the same time, the students in the schools were stuck on PII and 1st-gen PIII boxes (400-500MHz Slot 1 systems) with 64-128MB of RAM and 15" low-end CRT monitors that dated back to 1998-1999. Most of our textbooks were trashed, many were outdated, a lot of the teachers were buying school supplies with money out of their own pockets, etc.

      What it comes down to is these guys were spending (ballpark) $1000 on monitors (and probably another $700, at least, per computer; the receptionist at least had a Dell P4 box that couldn't have been more than a few months old since the P4 hadn't even been on the market for 6 months when I was down there), when a $300 17" flat CRT would've worked just as well, and when the money should have been spent on things like new books, school supplies, and decent computers for the students. And at the same time, they-along with the CA teacher's union and various politicians-were pushing for more funding for schools... to "help the children", naturally. Utter BS.

      That experience really cemented my belief that a lot of the decision makers in public service positions (and political lobbyists) are lying, self-serving individuals with little if any integrity, that absolutely cannot be trusted. They don't need more money for education, they need to stop wasting what they get on frivolities like $1000+ monitors for the district office.

      By the same token, how much money does CADOT waste on equipment they don't need, people they shouldn't be employing and the like? I honestly don't know, I haven't looked into it. But why don't we stop throwing money at these people until they can offer some kind of credible guarantee that it will be spent in a responsible fashion? Maybe I'm not looking in the right places, but I certainly haven't heard anything credible regarding taxes and funding of government programs come out of Sacramento that I can recall. And until they can offer that guarantee, I'm ok with the potholes, frankly.
      • 5 Years Ago
      Well, well,well, Grabbin Granholm is at it again. Squeeze every penny possible from a constituency which is already looking at a welfare state. Congratulations Governor, and another feather in your greedy little cap!
      • 6 Years Ago
      The gas taxes normally go into the general government fun for all projects, then get doled back out to the roads. Just like social security (you have no private social security account - accept it). When the government increases the gas taxes, there is no guarantee it will go to fun road improvement. In Florida, they started the lottery to help with education. Fine - lotteries are a tax on the stupid. However, they reduced regular funding for education and replaced it with the lottery money - in the end, a zero sum gain - although I suppose that would mean more people paying the 'tax on the stupid.'

      Look around the city of Detroit - the crumbling buildings...neighborhoods turning back into prairie and. This is what happens when you place your faith in government.
      • 6 Years Ago
      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.
        • 6 Years Ago
        Raise gas taxes and convince people to buy new, more fuel efficient vehicles with the money they don't have anymore...
        • 6 Years Ago
        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.
      • 6 Years Ago
      It's a relatively simple problem to describe, this tax business, but at present, impossible to fix. Americans do not like to pay taxes, period. Americans do however expect government to provide certain services. Americans will reject politicians who raise taxes and reject politicians who fail to deliver adequate public services.

      It's a little like the Hippies in the 1960's who demanded that everything from records to rock concerts to food be free. They had no way of explaining why bands would tour and record music for nothing or farmers grow food and give it away, but they knew it could be done.

      We've evolved. Now many of us (enough of us to dominate politics anyway) demand to have our taxes lowered, and our infrastructure maintained and we vote for politicians who promise to do both.

      I live in a state (MN) where the legislature wont bother voting for tax increases at all because the governor won't sign them. Instead we have a 5 billion dollar deficit and there are proposals to sell the airport and the state lottery, both good sources of INCOME, to close the gap. Since selling them will close only half the gap, there's still the rest to be raised and since they can only be sold once, they'll be gone the next time the state has a deficit, which happens every time there's a recession. That deficit will be worse because the state will have lost the income it now gets from the lottery and the airport. But hey, by then the governor will have moved on to run for the Senate or for the White House using the fact that he never raised taxes as a reason to vote to for him while the poor sucker who follows him into office struggles with the mess he's going to leave behind.

      This wasn't always the case. Once upon a time Americans understood that if you wanted government to do something, like defend the country or build and maintain the interstates, you had to agree to be taxed to pay for it. But since the present administration became the FIRST in American history to cut taxes in wartime, insuring that while expenses were rising, revenues were decreasing, the disconnect between what we expect government to do and what we expect to pay for it has become complete.

      So hey, let's cut taxes to zero. If you want an Army, Air Force, Navy, Marines or Coast Guard, send a voluntary check. If we raise enough, we can defend ourselves, if not...
        • 6 Years Ago
        "But since the present administration became the FIRST in American history to cut taxes in wartime, insuring that while expenses were rising, revenues were decreasing, the disconnect between what we expect government to do and what we expect to pay for it has become complete."

        This is simpl;y not true. Revenues have increased, not decreased. I'll assume that you are not lying but just misinformed. Every time a federal tax cut is enacted (the first one by President Kennedy in modern times), it leas to an INCREASE in federal revenues. This is because of the economic stimulus it cuases. But dome very smart people just can't figure that out. Kennedy's own treasury department told him that revnues would decline if he cut taxes. They increased instead. During the 80's the Reagen tax cuts doubled the revenue to the federal government. But our wonderful government spent more than it took in.

        Because of the Bush tax cuts federal revenue increased again and the yearly defict was DECLINING during years 2002 - 2007. But with the recession in 2008 and the new spending by boththe president AND the congress (now in the hands of Democrats) we are so screwed I don't knwo how we will ever pay it off. None of this is hard to find out if you go to the governemnt websites. All the facts and figures are there for anyone to see. Deficit, Revenues, GDP and the military budget, which by the way is less than 5% of the GDP. It was higher during the Kennedy years.

        Here is one stat: It's the GDP for years 2000 thru 2007. It's adjusted to 2000 dollars so you don't think that it's just inflation driving the year by year increase. Remember, the more GDP, the more tax revenues you collect.

        YEAR GDP (in billions) GDP in 2000 Dollars
        2000 9708.4 9708.4
        2001 10040.7 9811.1
        2002 10373.4 9966.8
        2003 10828.3 10192.3
        2004 11466.0 10597.0
        2005 12042.4 10938.7
        2006 12641.1 11190.8
        2007 13279.1 11877.4

        You can argue all day about what Bush has done or not done as president, but for most of his administration the economy has done well and the tax revenues were flowing into the federal coffers. But the increase in government spending by both Republicans (who thought they would become just like Democrats to stay in power) and Democrats assures us that we always spend more than the *even more* tax revenues we pay to them.
      • 6 Years Ago
      Michigan state government is in better fiscal shape than all but a handful of states, 43rd in terms of % of budget shortfall for fiscal year 2009, at $617 million. Calfornia's budget gap is $36 billion, New York $15 billion and rising as revenues fall as Wall Street lays thousands off. Southern states as well. Big Dick, Shelby's Alabama is 6th on the list with a 15% budget shortfall, and twice as large a debt, $1.2 billion, as Michigan.

      We can argue about the size and focus of the Michigan state budget and about tax policies, but the fact that the Michigan budget has to be balanced means that whoever has been in power in Lansing, Democrats or Republicans, they have to either raise taxes or cut spending somewhere else to pay for increased state expenditures.

      I know everyone would like to think of Michigan as a basket case, but its state government is better run than most. We don't owe money like California and New York, and our governors are not corrupt like Illinois and Lousiana (Bobby Jindal is breath of fresh air there and a true reformer).

      California, when you add up state and local governments, the number and rate of foreclosures and the steep fall in property values, is deeper in debt (absolutely and per capita) than Michigan including the city of Detroit and the domestic automakers.

      California will go bankrupt before Michigan. Hell, California will go bankrupt before General Motors.
      • 6 Years Ago
      Why did they separate the chart at 48.6 instead of 50, making NC red?
      • 6 Years Ago
      Michigan legislators cannot pass a workplace smoking ban but I'm sure they'll get this tax through in record time.
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