Senate Approves $1.5 Billion Road Plan
Thursday, July 2, 2015
Mike Nystrom, Executive Vice President of MITA, made the following statement following the Michigan Senate’s passage yesterday regarding legislation that will adequately fund our state’s roads and bridges:
“The Michigan Infrastructure & Transportation Association is pleased with the state Senate plan to bring additional funding to Michigan’s transportation system. Their plan is a balance between reprioritizing money within the state budget, which the public demands, but also recognizing the need to bring new, additional revenue dedicated to our ailing transportation system. This plan will help adequately fund Michigan’s roads and bridges for decades to come. We hope to see quick action in the House so that we can finally solve this ongoing road funding problem and stop the continued deterioration of our infrastructure.”
A Senate Republican plan to increase the gasoline tax and earmark income tax revenue to raise funding for roads (while cutting the income tax rate if revenue growth meets certain benchmarks) took a big step forward yesterday with approval from the full Senate.
The Senate amended various House bills on road funding to reflect the new Senate GOP plan and reported another bill (SB 414) to reduce the individual income tax rate beginning on and after January 1, 2018, if the percentage in General Fund revenue from the prior fiscal year exceeded a positive inflation rate for the same period. The rate, now 4.25 percent, would drop by a variable amount to be determined through a complicated formula.
That same bill would earmark amounts of income tax revenue to be deposited in the Michigan Transportation Fund: $350 million in the fiscal year 2016-17 and $700 million in each subsequent fiscal year through fiscal year 2032-33.
Important Pieces of the Senate Roads Package:
HB 4615 would increase the gasoline tax from 19 cents per gallon to 23 cents on October 1, 2015; 27 cents on January 1, 2016; and 34 cents on October 1, 2017. The bill also would increase the diesel tax to 21 cents per gallon on October 1, 2015; to 27 cents on January 1, 2016; and 34 cents on January 1, 2017. There is also an inflationary component to the gas tax increase.
The Senate also included a sunset to the gas tax, dropping it to zero in 2033. This measure is intended to force the debate for future road funding increases.
The cuts and fund shifts would take effect January 1, 2017, and the gas tax would rise according to inflation once the three-year, total 15-cent per gallon increase is in place.
In total, the plan will find $1.5 billion or more annually for Michigan’s transportation system.
The next phase is gaining support in the House. Officials have indicated that the House may act as early as the week of July 13th, as that is the next time they will be in session.
If you have any questions regarding this latest development, please do hesitate to contact Mike Nystrom, Executive Vice President, at firstname.lastname@example.org or Lance Binoniemi, VP of Government Affairs, at email@example.com. They can also be reached at the MITA office at 517-347-8336.