CHICAGO — The Michigan Senate has approved a new road funding tax that could raise as much as $1.5 billion in new annual funding, marking a victory for Gov. Rick Snyder.
The bill, House Bill 5477, now heads to the House.
The Senate approved the bill on Nov. 13 by a vote of 23-14. The legislation failed in early rounds, but gained approval when a group of Detroit Democratic senators supported the bill after it was amended to allow Detroit to tap some extra highway revenue for mass transit.
"Today, Detroit's five state senators stood united in supporting a major road funding package," Detroit Mayor Mike Duggan said in a statement. "This bill will allow us to speed up repair of Detroit's roads and make major improvements to the bus service for our 100,000 passengers daily."
The legislation would shift the state's gas-tax funding formula to a wholesale percentage tax from the current 19-cent-a-gallon tax. The wholesale tax would translate into roughly a 33-cent-per-gallon tax level next year, reaching more than 40 cents by 2018.
The new tax would begin at 9% next spring and grow to 15.5% by Jan. 1, 2018.
The new tax could raise between $781 million and $1.5 billion a year when fully implemented, according to a Senate Fiscal Agency analysis.
The package is part of an ongoing debate between lawmakers and Snyder over road funding. Snyder has pushed for three years for the Legislature to raise new revenues to generate at least $1.2 billion a year, which he says is needed to maintain the state's roads and help close a $26 billion funding gap.
"I commend the state Senate for its bipartisan action today and remain committed to working with our partners in the Legislature on comprehensive solutions to Michigan's infrastructure needs," Snyder said in a statement. "It's essential for boosting our state's economy, creating jobs, improving our quality of life and the safety of our residents and visitors."
