House Republicans outlined a new proposal to
reallocate a portion of revenue garnered from fuel taxes and use taxes to
generate up to $500 million per year for road funding by 2018. The plan calls
for dedicating the portion of the fuel sales tax revenue that would normally go
to the General Fund to road funding, as well 1/6 of use tax revenue. The other
proposals include replacing the per-gallon tax charge on fuel with a 6 percent
wholesale tax, which would garner an extra $47 million from diesel sales.
The plan will provide $450 million initially
in 2015, which is expected to increase by 2018. $133 million of the proposed
$450 million will stem from what has been trimmed from the Governor’s budget
proposal by the House. The plan will also require all road projects costing
more than $5 million to have a minimum five-year warranty, as well as require
appropriate warranties for all other road projects. It also provides for the
allocation of late payment fees for licensing and regulation to road funding,
simplifying the vehicle registration code, applying newly purchased vehicle
value immediately upon the transfer of plates, and increasing the overweight
and oversized permit fees. Speaker Bolger (R-Marshall) also indicated that the
plan will also try to begin to use new contracting methods such as
performance-based maintenance contracting.
Governor Snyder has called for at least $1.2
billion in road funding per year, as have numerous recent studies. Some
organizations and legislators believe that the plan is inadequate, but others
such as Representative Wayne Schmidt (R-Traverse City), Chair of the House
Transportation and Infrastructure Committee, and House Minority Leader Representative
Tim Greimel (D-Auburn Hills) claim it is a good starting point. Speaker Bolger
stated that he hopes to have a solution before summer recess.