How much would a proposed 45-cent increase in the gas tax cost the average Michigan driver?
Gov. Gretchen Whitmer unveiled her proposal to fix the roads this week, with a 45-cent increase in the gas tax, which would make Michigan's fuel tax the highest in the U.S.
The proposal — the centerpiece of a $60 billion budget plan — followed her November election victory over Republican Bill Schuette in part on a promise to “fix the damn roads.”
The $2.5 billion plan would increase the 26-cent fuel tax by 45 cents between this October and October 2020 and guarantee that the additional revenue is targeted to more heavily traveled roads. To alleviate the burden for some motorists, she proposed a tax overhaul under which retirees and low-income earners would get breaks while more businesses would pay a 6 percent tax instead of the lower 4.25 percent personal income tax.
“No one likes to raise taxes,” she told lawmakers during her first budget address as governor. “I wish I didn’t have to come here today and put this budget before you because I know it’s hard. But the hard truth is we got to get to work. Every day we don’t we are jeopardizing our economic future, wasting our money and endangering our people. No more shell games and half measures. Here’s a real plan.”
How much will it cost you?
The plan would work as a usage fee. The more you drive, the more you pay.
Whitmer said her proposal would cost the average driver $23 a month, or $276 a year, but contended that motorists already are paying a “roads tax” for vehicle repairs caused by crumbling infrastructure.
She proposed doubling the earned income tax credit for low-income residents, saving 750,000 families $30 a month, and repealing the so-called retirement tax on pension and other income — saving 400,000 households $65 per month.
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