Michigan Legislature votes to halt state gas tax; Whitmer signals veto, supports pausing federal tax

LANSING, MI - MARCH 17: The Michigan State Capital building is seen March 17, 2008 in Lansing, Michigan. Negotiations for a re-vote Michigan primary are continuing between the Democratic National Committee, the Michigan legislature, and the two democratic presidential candidates. (Photo by Bill Pugliano/Getty Images) (Bill Pugliano, 2008 Getty Images)

LANSING, Mich. – Michigan lawmakers voted Tuesday to suspend the state's 27.2-cents-a-gallon gasoline and diesel taxes for six months, finalizing a bill that Gov. Gretchen Whitmer has signaled she will veto.

The Republican-sponsored legislation was approved 24-14 on mostly party lines in the GOP-controlled Senate after the House passed it last week. It is written to save drivers facing higher pump prices about $750 million by freezing the taxes from April through September, but it would not take effect until next year due to Democratic opposition.

Whitmer, a Democrat, has instead supported halting the federal 18.4-cents-per-gallon gas tax and 24.4-cent diesel tax while calling for negotiations to commence on permanent, targeted state income tax deductions and credits for retirees and lower-wage earners. She will soon veto a separate Republican-backed measure that would cut the state income tax, bolster deductions for seniors and bring back a child tax credit.

The statewide average price of a gallon of regular unleaded gas was $4.23, down slightly from a record high last Thursday. It was up from $4.18 a week ago and $3.35 a month ago.

The federal legislation supported by Whitmer would shift general funds to ensure there is no impact on road and bridge funding. Republicans say they would do something similar if she signs the state bill.

“The tax that the governor herself had asked the feds to do — we are doing an even bigger, better gas tax (freeze) for the people here in the state of Michigan,” said Republican Sen. Jim Runestad of White Lake.

“Let's pass this relief right now. It doesn't limit us in the amount of relief that we can give and the amount of backfill that we can provide with all of the money we have" from a multibillion-dollar budget surplus, Republican Sen. Ken Horn of Frankenmuth said.

All but two of 16 Democrats voted against the measure, instead floating a proposal to temporarily pause the 6% sales tax on fuel and keep intact funding for schools and municipalities that benefit. The state's per-gallon tax funds road and bridge work.

“We all know there are potholes everywhere that need to be filled and massive road and bridge projects in our districts and around the state that need to be completed,” said Sen. Stephanie Chang of Detroit.

Democrats withheld support for giving the bill immediate effect. That means that even if Whitmer signed it, it would not go into law until March 2023 and at that point might be meaningless since the freeze is proposed to start in just over two weeks.

“Gov. Whitmer is ready to take action to immediately lower costs and put more money back in people’s pockets," spokesperson Bobby Leddy said in a statement that said she is ready to negotiate a bipartisan measure.

Despite the impasse, a deal to ease pump prices may still be within reach.

The Senate's top Republican, Majority Leader Mike Shirkey, said Tuesday he supports eliminating the fuel sales tax, saying he “cannot wait to put a stake in the heart” of the levy. Senate Minority Leader Jim Ananich has suggested suspending the tax for a year.

According to the nonpartisan Senate Fiscal Agency, Michigan drivers on average buy 557 gallons a year. They pay $151 in per-gallon taxes and, at current prices, $125 in sales taxes. They would save roughly $75 under the bill heading to the governor.

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