Legislative Update: Gas Tax, MBT and Federal Road Dollars
Thursday, July 12, 2007
If you think high gas prices have meant the end to MITA’s transportation funding initiative, think again. For the last four days articles and editorials supporting the need for more transportation funding have appeared in newspapers and television stations across the state. The renewed support was kicked off with a front-page article in The Detroit News July 9 entitled “Road work jobs fade as state cuts back,” which was initiated by MITA. The article featured comments from MITA staff, MITA Board President Brian Slagter of Slagter Construction and MITA Board Member Chris Shea of P.K. Contracting, Inc.
Here’s a quote that epitomizes the sentiment of these articles and editorials: “We believe a 9-cent increase in the gas tax for better maintenance of roads will go directly back into the pockets of taxpayers in terms of less time on the road, fewer accidents and less wear-and-tear on vehicles.” These ideas were taken from this year’s TRIP Reports. The reports are posted on the DriveMI website and can be found by
We will keep you posted on further progress as MITA continues to lobby for increased transportation funding.
Click on the following links to read just a few key examples of the recent articles and editorials:
The Detroit News, July 9, 2007
Kalamazoo Gazette, July 10, 2007
The Detroit News, July 11, 2007
Lansing State Journal, July 12, 2007
Governor Signs MBT into Law
On Thursday, Gov. Granholm signed the new Michigan Business Tax (MBT) into law. The new tax structure will be in effect beginning January 1, 2008.
Calculations from a number of MITA members estimated that the original proposal would have raised taxes by as much as 400 percent on contractors in the heavy construction industry. Because of diligent lobbying efforts, MITA was able to get key concessions in the legislation before the bill was passed by the Legislature and signed into law.
Federal Road Dollars To Plummet
The Bush Administration today released a mid-year budget forecast that estimates the Highway Trust Fund’s Highway Account will have a $4.3 billion negative balance for FY 2009.
This scenario is significantly worse than the one the administration presented Congress in its budget proposal just five months ago. That document predicted the Highway Account would have a negative $700 million balance in FY 2009. Now, however, the administration is projecting a continuing precipitous drop in federal revenue into the trust fund’s Highway Account, with the negative balance growing to $9 billion in FY 2010 and $15 billion the following year.
U.S. Transportation Secretary Mary Peters told members of the House and Senate Appropriations Committees, which provide annual funding for the transportation and other discretionary federal programs, the downturn in trust fund revenues is a result of declining motor fuel purchases. Peters said this situation reinforces the need to accept the administration’s proposal to cut SAFETEA-LU’s guaranteed level of highway investment by $631 million to help mitigate the projected shortfall.
The American Road & Transportation Builders Association along with MITA are pushing for reforms at the federal level which include restructuring existing motor fuel tax exemptions that provide certain system users a break on fuel tax payments and cracking down on illegal fuel tax evasion. Exemptions cost the Highway Account more than $1 billion per year. The Senate Finance Committee has identified steps to combat fuel tax evasion that could generate more than $500 million over the next two years.
If you have any questions, please contact Mike Nystrom, Vice President of Government & Public Relations at email@example.com or Keith Ledbetter, Director of Legislative Affairs at
firstname.lastname@example.org, or call the MITA office at (517) 347-8336.