
A top Republican in the Michigan House has unveiled a transportation funding plan to apply nearly $3 billion in state funds to fix roads and bridges.
With the Michigan House and Senate scheduled to return to the capitol on Tuesday, Dec. 3, House Speaker-elect Matt Hall of Richland Township wants to get a transportation deal done before the current regular session ends later in the month.
Devoting fuel taxes to roads
Hall’s plan would tap existing fuel revenue and the state’s corporate income tax to bolster local transportation infrastructure projects.
He said the proposal comes as Michigan’s general fund spending has grown by more than $4 billion over six years – a 40% increase – with roads and bridges receiving almost none of the increase.
“Everyone says they want to fix the roads when the cameras are on, but nobody has taken any real steps to do it these past two years,” Hall said in prepared remarks. “The people are sick and tired of inaction and empty words.”
His comments were directed at Democratic Gov. Gretchen Whitmer’s notable statements since taking office that she would “fix the damn roads.”
Hall said that state lawmakers can do something now and not wait until the 2025 regular session begins in January. At that time, House Republicans will be the majority party in the chamber while Democrats will continue to lead the Senate.
Specifically, his plan calls for immediately allocating $1.2 billion of corporate income tax revenue to infrastructure. An additional $600 million in funding would follow in 2026, with every penny of state tax at the fuel pump applied to road funding.
Michigan collects a 30-cent excise tax on gas and diesel purchases. Due to an automatic adjustment component, the tax rate will increase one penny to 31 cents on Jan. 1, 2025.
The state also collects a sales tax on fuel purchases, but the revenue does not go to transportation. Nearly all of the sales tax collected goes to schools and local government.
Hall wants 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.
He said the change would yield about $945 million in additional resources and hold school funding harmless from the decrease in sales tax revenue.
“State revenue has exploded in recent years and so has government spending. But what do we have to show for it?” Hall said. “Politicians spending billions of dollars every year on new projects and new programs, and then they turn around and say they have no money available for our local roads. It’s a lie.”
The County Road Association of Michigan supports Hall’s plan.
“We applaud the plan … to take on road funding in the ‘lame duck’ session,” County Road Association of Michigan CEO Denise Donohue stated.
House Republican Leader Matt Hall (at podium) held a media event today to discuss his proposed plan for a $2.7 billion annual road funding increase. We applaud the plan and stand ready to work with any and all groups to address MI’s road funding crisis. The time to act is now! pic.twitter.com/11N3tvLmQW
— CRA (@MICountyRoads) November 25, 2024
More needed to get road work done
Meanwhile, statehouse Democrats are pursuing implementation of a voluntary mileage-based user fee, or road usage tax.
The pilot program would be funded with money from the state’s general fund.
The County Road Association of Michigan has supported a road usage tax study. The group said the state is “lagging behind” on transportation funding.
A recent report from the group found Michigan would need $2.4 billion of additional funding to meet goals of fixing county roadways throughout the state. Overall, the state faces an estimated $3.9 billion annual deficit in road funding. LL
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