Speaker Bolger Unveils New Michigan Transportation Funding Plan

Posted on April 3, 2014 by Dene Westbrook

A new plan from House Speaker Jase Bolger (R-Marshall) would increase the state’s annual investment in its roadways by at least $500 million annually.

Unveiled today, the plan would do that, in part, by converting the state’s flat gas tax to a tax based on a percentage of the wholesale price and by dedicating some current sales tax and use tax revenue to transportation needs.

The plan focused on four specific subject areas: increasing efficiencies, improving quality, improving fairness and investing current resources. That’s different from other plans that have focused on tax increases to improve the state’s roads.

The proposal includes ending the 19 cents per gallon tax on gasoline and 15 cents per gallon tax on diesel fuel and replacing them with a 6 percent tax on the price of fuel at the wholesale level. This would be a revenue neutral change for gasoline and raise $47 million in new revenue from those buying diesel fuel.

The proposal also includes efficiency measures such as more competitive bidding for local road agencies and the Department of Transportation and requiring all projects more than $5 million to have a minimum five-year warranty.

The plan would also increase fees on permits for overweight and oversize trucks, a move that would raise $4.5 million.

The Michigan Municipal League believes that one of the most important aspects of creating a vibrant state is to have a quality transportation system. Unfortunately an additional $500 million annually falls far short of solving this problem long term. We hope to work with the Speaker and others on this issue to provide a long term funding solution that meets the infrastructure needs of this state without potentially putting local funds in jeopardy.

The following links are two documents made available by the House Republicans to help illustrate their plan.

Building Roads 4-14          Road Funding board

The League will continue to update our members on the specifics of this plan as more details become available.

John LaMacchia is a Legislative Associate for the League handling transportation and infrastructure issues. He can be reached at [email protected] or 517-908-0303.

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