Inside208

Senate Votes to Pause Gas and Sales Tax at the Pump for Three Months

Posted on May 26, 2022 by Dene Westbrook

The Senate quickly brought up and passed a proposed three-month suspension of the state’s tax on motor fuel, along with a proposed suspension of the sales tax on motor fuels. Senate Transportation Committee passed the bills early Thursday morning, and they were passed by the full Senate a few hours later.

The four-bill package (SB 972, SB 973, SB 974 and SB 1029 ) was introduced in an attempt to provide relief for residents and small businesses that are being impacted by rising gas prices. Senate Transportation Committee passed the bills early Thursday morning, and they were quickly voted on by the full Senate a few hours later.

Under SB 972, SB 973, and SB 974, the 6 percent sales tax on motor fuels would be suspended from June 15, 2022, through September 15, 2022. The League opposed these bills as they did not include replacement funding to cover the reduction in constitutional revenue sharing that would occur. According to The Senate Fiscal Agency, the three months pause in collection could result in a loss between $36.3 million and $38.3 million for local units and a loss between $266.3 million and $280.5 million in revenue for schools.

The state’s gasoline tax would be suspended for the same period under SB 1029. A substitute adopted in committee would provide $300 million General Fund to offset revenue losses to local governments.

SB 972, SB 973, and SB 974 all passed by a vote of 36-1, and SB 1029 passed by a vote of 30-7.

We understand that higher prices on gas are putting a strain on individuals and businesses. Any relief that is provided though should not come at the expense of local revenue but should be covered by the billions in resources the state currently has available. The House could vote on these bills as soon as June 7th and we encourage you to reach out to your Representative and ask that they hold locals harmless.

John LaMacchia is the League’s director of state & federal affairs. He can be reached at jlamacchia@mml.org or 517-908-0303.

Locations
Headquarters
1675 Green Road,
Ann Arbor MI 48105
 
Capitol Office
208 N. Capitol Ave.,
1st Floor Lansing, MI 48933
©2022 Michigan Municipal League LLC. All rights reserved