Mueller bill sends all taxes paid at the pump to fix local roads

State Rep. Mike Mueller is sponsoring a common-sense reform that would help fix crumbling local roads and bridges without a tax increase.

The proposal, included in House Bills 5582-85 and 5587-88, 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.

Mueller’s bill 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 bonding plan does nothing to fix the county, city and village roads we drive on our way to work and school,” said Mueller, of Linden. “The legislation ends the shell game and directs all of the taxes we pay at the pump to our local road agencies, so they will have additional resources to fix the roads we travel the most.”

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% of Michigan roads. This revenue-neutral plan will instead result in approximately $800 million annually in additional funding for the other 92% of roads that connect driveways to highways in every corner of the state.

The legislation unveiled today 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 proposal will be referred to the House Appropriations Committee for consideration.

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