Michigan governor wants transportation-funding fix -

Transportation funding is a leading topic of conversation at the Michigan statehouse and the governor’s office.

For the seventh straight year, Democratic Gov. Gretchen Whitmer called for state lawmakers to come up with a long-term transportation-funding solution. The task is expected to be more challenging this year, with House Republicans gaining control of the chamber. Democrats again claim the Senate majority.

A report from the County Road Association of Michigan found the state faces an estimated $3.9 billion annual deficit in road funding.

Urgency for a transportation-funding solution in the state is enhanced with the $3.5 billion in bonds her administration tapped in 2020 to fund highway work soon to run out.

Governor calls for a fix

During a recent speech at the Detroit Auto Show, Whitmer called on both sides of the aisle to find new and fair sources of revenue as well as “explore fiscally responsible cuts” to ensure Michigan can keep repairing and rebuilding roads.

“We need a sustainable, long-term solution so we can fix the damn roads using the right mix and materials,” she said. “If we don’t find a solution, our roads will get worse and more dangerous.”

The governor added that she has been working with new House Speaker Matt Hall, R-Richland Township, on a long-term road-funding solution.

House Speaker wants to devote fuel taxes to roads

Hall has released a transportation-funding plan. He touts that his plan would tap $3.1 billion in annual revenue without raising taxes.

Hall is focused on using fuel revenue and the Michigan corporate income tax to bolster local transportation infrastructure projects.

Specifically, he wants to allocate $2.2 billion of corporate income tax revenue to infrastructure and apply every penny of state tax at the fuel pump to road funding.

In addition to the excise tax on fuel purchases, the state collects a fuel sales tax, but the revenue does not go to transportation. Nearly all of the sales tax collected goes to schools and local government.

Hall is looking to replace the sales tax with a corresponding revenue-neutral increase in the excise tax. The move would ensure that all fuel tax revenue is applied to infrastructure.

The change is estimated to raise $945 million in additional road revenue.

“Roads and infrastructure are top priorities, and our budget choices should reflect that,” Hall said in prepared remarks.

Whitmer said once more in her “Road Ahead” speech she wants to “fix the damn roads,” but she can’t do it without “new revenue” (tax hikes).
House Republicans have had a plan since November to fix roads without Michiganders paying another dime.

— Michigan House Republicans (@MI_Republicans) January 15, 2025

House Democrats offer other options

House Democrats recently offered plans to permit tolling, to raise the state’s fuel tax rate by 19 cents per gallon and to increase vehicle registration fees.

Michigan fuel tax rates increased on their own Jan. 1. The automatic penny increase raised gas and diesel rates to 31 cents per gallon.

Senate Republicans have questions

Senate Republicans want to know what happened to a record $9 billion state surplus from 2023.

“The governor ran her first campaign on a tagline promising to fix roads. Instead, she has compounded our debts, taking out unilateral bonds,” Senate Republican Leader Aric Nesbitt of Lawton wrote in an opinion-editorial to The Detroit News.

He added that during her term, “the governor has failed to offer up any real solution.” LL