House Passes Revenue-Neutral Road Plan

The House passed bills Thursday to remove the sales tax from gasoline over six years, which would reallocate hundreds of millions in funding to roads that would otherwise be granted to schools and local governments. The sales tax would be replaced with an eventual 13.5 percent wholesale tax on gasoline. In light of criticism from Democrats and schools, House Republicans adopted an amendment that would eliminate the new taxation system and reestablish the 6 percent sales tax if the K-12 School Aid budget or funds for municipalities decrease year over year.

Governor Snyder currently supports the bipartisan plan passed by the Senate that would eventually raise the new percentage based gasoline tax to 15.5 percent while leaving the gasoline sales tax in place. Both proposals are projected to lead to $1 billion in additional funding to be put toward the state’s roads. The House, however, is seeking to do so without collecting any new revenue.

HB 4539 would remove the sales tax from gasoline and was passed 56-53 with all Democrats opposed as well as Representatives Bob Genetski (R-Saugatuck), Dave Pagel (R-Berrien Springs), and Paul Muxlow (R-Brown City). The substitute version of the bill would phase out the sales tax by a percentage point each year until it is eliminated in 2021. HB 5477 institutes the new wholesale tax over four years.

Ari Adler, speaking for Speaker Jase Bolger (R-Marshall) noted there were no discussions with Senate leadership on possible changes. Senate Majority Leader Randy Richardville (R-Monroe) said negotiations would be necessary.

posted by PAA Online , Friday, December 5, 2014 2:25 PM
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