Want better roads? Expect Michigan gas tax increase

By Rod Meloni - Reporter, CFP ®

DETROIT - Every Michigan resident has a street near them they don't want to drive on.

The pot holes are horrifying, and if it's not an open pot hole it is the myriad bumpy clumps of asphalt used to close the hole which combine to make a washboard seem smooth that have them frustrated.

On the street behind my house, the southbound cars swerve into the northbound lane to avoid the suspension-destroying mess they call a street. The pot holes were down to dirt and the temporary fix may have made the problem worse.

We all want these roads fixed, and they hear us in Lansing. The outcry is so loud that the Michigan House already passed a gasoline tax increase. The Senate is looking at one that is even bigger in an effort to quickly get some more road projects moving in an election year.

However, Senator Bert Johnson, of Detroit, and others are warning there needs to be some nuance applied to this situation that is lost as the legislature looks to head home for the summer campaign. The House is looking to increase the gasoline tax one penny a year for 11 years after 2015. The Senate is looking for a quicker and bigger hike that could double the gasoline tax 20 cents a gallon on top of the 19 cents we already pay.

But there are many in Lansing who realize there are a couple of problems with this scenario. First and foremost: Michigan is in the top 10 of gas tax states already -- California is No. 1 at 71 cents, followed by New York and Connecticut at 68 and 67 cents respectively. Michigan right now is at 59.7 cents. Under the plan the Senate is looking at passing in the next few days, we could surpass California. Michigan also is one of the few states in the nation that has both a fuel tax and a sales tax. This proposed tax hike raises the question: Is this a Republican Legislature? What happened to the low tax, smaller government mantra?

As best I can tell -- after spending a little time looking into this quite complex subject -- is that while a tax hike of this kind may get us a few more smooth roads, it doesn't help much economically. When gasoline prices tick up over $4 a gallon, the gasoline buying public not only stops travelling as much, it also stops spending money on other things out of the fear gasoline prices will move northward and further strangle budgets. Need I remind Lansing tourism is Michigan's No. 2 industry?

Another problem Lansing does a pretty good job of hiding is the fact that most of your gasoline taxes don't go to road funding or fixing either. The sales tax goes into the general fund. The fuel tax is split between the feds and the state for "transportation" costs. Busses and airports voraciously spend much of that cash. Add the highest in the nation weight limits and Michigan's roads don't get much repair but a lot of damage.

In the fervor to make voters happy to see more orange barrels in the warmer months [a uniquely impressive feat all by itself] the legislature is missing one very big point: There are billions of dollars pouring into Lansing from the gas pump, why not just spend it on roads? Also, there are 100 different ways to pay for more roads than raising the gasoline tax.

These questions get heard inside the Legislature but this requires time and patience and reason. This summer, with the clock running out on the session, it doesn't appear there is much appetite for taking that time.

So, as I was told during my travels in Lansing this week, expect a tax hike of some kind -- an unpleasant one at that -- to make certain there is more money dedicated for roads. Whether that funding formula changes remains a possibility as does the idea that we might never be under $4 a gallon for gasoline again.

That is something Michigan's driving public isn't going to want to contemplate either.

Copyright 2014 by ClickOnDetroit.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.