Members of the Michigan Legislature have the best chance in decades to fix and maintain our roadways through legislation that will allow voters to create a dedicated funding mechanism – one that would actually lower the price at the gas pump.
A package of bills – SJR N, SB 714 and SB 715, known as the Walker plan named after its author, State Senator Howard Walker (R-Traverse City), would eliminate the motor fuel tax and replace it with a one cent increase on the state sales tax.
More importantly, even though sales tax on gasoline would increase, overall the price of gasoline would drop 16 cents per gallon. This would save the public about $800 million per year at the pump.
This concept is resoundingly supported by taxpayers. The Michigan Petroleum Association/Michigan Association of Convenience Stores commissioned a statewide poll that indicated overwhelming support for eliminating the state’s motor fuel taxes on gasoline and diesel fuel, and increasing the sales tax from 6 to 7 percent to raise revenue for the state’s roads. Respondents resoundingly supported this proposal over a fuel tax increase.
Today, Michigan motorists pay over 50 cents a gallon in taxes on gas and diesel – which includes separate taxes on gas and diesel and sales tax on both, making Michigan the 5th highest fuel tax state in the country. The current tax rate is neither business-, nor consumer-friendly. The Walker plan would drop the state to 33rd highest for gasoline.
Lansing must find another way to fix our roads. The Walker Plan is a better alternative to another legislative proposal that would increase the state gas and diesel tax to 28.3 cents per gallon respectively. This would be an increase of nearly 49 percent on gas and 88 percent on diesel. Gallons of gasoline sold have declined more than 15 percent since 2004 as people drive less and purchase more efficient vehicles. Raising the price of motor fuel through higher taxation will punish consumers and crush our fragile economy.
The Michigan Petroleum Association/Michigan Association Convenience Stores, representing over 2,500 independent station owners who employ 15,000 people throughout Michigan’s 83 counties, is opposed to increasing the price of motor fuel by increasing fuel taxes, and believes it is a misguided solution to improving state roads and bridges. Our local, family-owned stations make little or no profit on the fuel they sell, and must rely on items purchased inside their stores to stay afloat. Many have called it quits, putting their workers in the unemployment line. A fuel tax increase will likely put more stations out of business, more people out of work, and consumers will have less in their pockets to spend in our stores.
The Walker plan will provide a stable funding source for roads by spreading that cost over a broader spectrum of the economy, not just adding it on the cost of motor fuel. Clearly that policy has failed to provide the funding desired, and won’t provide enough in the future.
Lawmakers should let the voters decide to eliminate the state’s motor fuel taxes and increase the sales tax to pay for our roads and thus reduce the price of fuel at the pump. They should move to place the Walker plan on the November ballot.
Mark Griffin, President
Michigan Petroleum Association/Michigan Association of
Convenience Stores
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