State Rep. Matt Hall (R-Marshall) today announced his support for a common-sense, bipartisan reform that would help fix crumbling local roads and bridges without a tax increase.
The proposal, included in House Bills 5582-87, would eliminate the sales tax on fuel and replace it with an equivalent, revenue-neutral tax on fuel dedicated solely to roads. This would dedicate roughly $800 million more per year to road repairs without raising taxes, an effort Hall said respects families across Calhoun and Kalamazoo counties.
“Hard-working Michigan families are tired of their state government treating them like ATM machines,” Hall said. “Rather than follow the governor’s tax-and-spend strategy, we are making sure every single penny paid at the pump goes to our local road agencies to fix the roads we travel on the most.”
The legislation would ensure all revenue collected by the replacement tax at the pump is dedicated specifically to local road funding – filling a gap left behind in the governor’s road bonding plan.
The governor’s proposal took on $3.5 billion in new one-time debt to be spent on only state-owned roadways, which make up about 8 percent of Michigan roads. Hall said the revenue-neutral plan will instead result in approximately $800 million annually in additional funding for the other 92 percent of roads, with the revenue breakdown being 60 percent for county roads and 40 percent for city and village roads.
“Maxing out the state credit card to accrue massive amounts of debt that will take decades to pay off is not a solution to the problem,” Hall said. “What we are doing is targeting the crux of Michigan’s road dilemma, and that is making sure the revenue generated by gas taxes we already have implemented are going toward what they were actually supposed to go.”
Hall said the proposal also includes strict protections to ensure schools are not hurt from the change. It requires the state treasury to backfill any loss of revenue to the school aid fund with income tax revenue.
The measures now move to the House Appropriations Committee for consideration.