The gas tax was among several topics discussed among lawmakers at a West Michigan Chamber of Commerce governmental affairs breakfast in Holland. Lawmakers generally agreed there potentially needs to be some new revenue for roads, but poked holes in Whitmer’s budget and gas tax.
If the $60.2 billion state budget is approved, Michigan will have the highest fuel tax. The proposed gas tax, expected to raise $2.1 billion, departs from putting the money through the regular formula under Public Act 51 of 1951, where most of the road money goes to local road agencies; instead, a greater portion of the funding will be spent on MDOT roads.
The tax will raise the price of gas and diesel by 15 cents three times from Oct. 1, 2019, through Oct. 1, 2020, and is expected to generate $2.5 billion in new annual revenue.
Among Michigan’s 83 counties, Ottawa County will be affected the most by the proposed new funding formula, said Ottawa County Road Commission Communications Director Alex Doty.
“We appreciate the new funding that’s being proposed and think the amount is something we have waited a long time to see, so we’re on board with the amount that’s on the table and glad to see roads are a priority,” Doty said. “One of the things we’re having trouble with at this point is the way that those funds would be distributed based on the plan released last week.”
The Ottawa County Road Commission would get about $6.4 million in road funding by 2021 with the governor’s plan, but it would receive about $18.9 million if Act 51 was used, Doty said. The $12.5 million difference in funding means Ottawa County will see the highest discrepancy between the funding models more than any other county in Michigan.
Doty said the Road Commission is examining if this is because there are less MDOT roads in the county.
“People should know that we’re hopeful that the governor and legislators can work out some kind of plan that will increase funding for roads,” Doty said. “There are quite a few unmet needs.”
From an economics background, state Rep. Jim Lilly, R-Park Township, called the gas tax “irresponsible,” but he did agree that they “probably do need to talk about additional revenue for roads.”
State legislators at the chamber event were Republicans, comprised of Lilly, Sen. Roger Victory, Sen. Aric Nesbitt, Rep. Mary Whiteford, Rep. Brad Slagh and Rep. Luke Meerman. The ticketed event was only for chamber members.
“This is probably the most regressive tax that I’ve ever seen proposed at the state level,” Lilly said. “I have some pretty significant concerns about that.”
With the highest insurance rates in the country, people will not be able to afford much of an increase in gas, said Whiteford, R-Casco Township.
“We really need to have a measured response on that, and taxing people is easy,” Whiteford said. “The hard part is figuring out how to find inefficiencies in how we’re spending our money.”
Meerman, R-Coopersville, said people need to understand where the state is lagging in road funding.
“There is a difference in trying to catch up and trying to catch up too fast by overtaxing,” he said. “There probably is some needed extra road funding, but I just want to be cautious that we don’t jump the gun and say, ‘Hey we’re going to get there today.’”
With the criticism of Whitmer’s budget proposal, especially the gas tax, there have not been alternative budget plans proposed from people who oppose her plan.
“We will have to do that,” Lilly said. “I want to be clear about that. You can only oppose a plan for so long before you have to come up with your own, and we will.”
They held off on forming their own budget, Lilly said, because they were “generally hopeful that the governor’s plan would be the bold plan she promised it would be.”
“Had we known it was just going to be a 45-cent tax increase, we probably would have a different plan ready to go already,” Lilly said.
Doty also hopes lawmakers will work on finding a permanent solution for road funding in the future.