Gongwer News Service: Take advantage of lower gas prices to pass transportation funding hike
Wednesday, April 29, 2009
With gas prices hovering around the $2 mark for several weeks, lawmakers were told now is the time to act on a transportation infrastructure funding package that would include going to a wholesale gas tax and increasing vehicle registration fees.
Officials from the Michigan Infrastructure and Transportation Association told members of the House Appropriations Transportation Subcommittee on Tuesday that tough decisions have to be made in order to catch funding up to the level it needs to be to support the state's roads and bridges.
"When is a good time to raise taxes or increase fees? You aren't going to find a good time. This is looking at you in the face," said Mike Nystrom, vice president of government and public relations for MITA.
Even with the state receiving $873 million for transportation projects through the federal stimulus package, Mr. Nystrom said that is a "drop in the bucket" in terms of the state's overall needs that are closer to $3 billion.
And he said congressional lawmakers are not likely to act on equalizing the amount of money coming to Michigan that it sends out until the state puts its own house in order.
Mr. Nystrom said he understands there are some measures that can be done that lawmakers support, such as reviewing interdepartmental grants and going through with some cuts to give transportation more money, but he said that would not be enough to cure the problem.
Ed Noyola, deputy director of the County Road Association of Michigan, said there are options to deal with transportation funding, including raising the $8 transfer fee on vehicles based on when they buy a new car and whether they upgrade to a nicer vehicle. But he said steps like those would raise $15 million to $18 million.
The bottom line: the state needs to generate more revenue from the fuel tax and registration fees, he said.
"There's a multitude of areas we could generate revenues from. We're not just trying to beat up on the gas tax," he said.
But Rep. Doug Bennett (D-Muskegon) questioned why the state would make a move to increase fuel taxes if the next generation of cars will be electric and not gas-powered.
David Worthams, legislative associate for the Michigan Municipal League, said the group does believe the wholesale fuel tax and other measures will buy officials some time to prepare a tax and fee system for the next generation of automobiles. And Keith Ledbetter, director of legislative affairs for MITA, estimated the proposal could be a 10- to 20-year solution until another user fee system is created.
Rep. Lee Gonzales (D-Flint), chair of the subcommittee, said there will be continuing dialogue on the transportation funding proposal, but the key is to get to "syzygy."
While jokingly commenting that he's "been saying rosaries quite often," Mr. Worthams said his organization and others are continuing to work on building support for the proposal.
But he also said it's clear the package would either need to be passed by the end of June or else it won't happen until after the 2010 election is over and lawmakers are in the lame-duck session.