Democratic Gov. Gretchen Whitmer called Tuesday for nearly tripling Michigan’s per-gallon gas tax — and making the state home to the country’s highest fuel taxes — in order to improve aging roads that she warned would only get worse without a major influx of new spending.
RETIREMENT TAX: Gov. Whitmer proposed repealing a 2011 law that eliminated or reduced exemptions from the taxation of pension and other retirement income, saving more than 400,000 families an average of $800 annually.
The plan would increase the current 26-cents-per-gallon tax by 45 cents. To alleviate the burden for some, she proposed a tax overhaul under which retirees and low-income earners would get breaks while more businesses would pay corporate income taxes.
The proposal is an attempt to reverse parts of a tax rewrite enacted by her Republican predecessor, Rick Snyder.
”I know this won’t be easy, but with one historic vote we can make the investments that are necessary to finally start fixing the damn roads,” Whitmer said in a news release issued as she began her first budget address as governor.
ROADS: Gov. Whitmer proposed a 45-cents-a-gallon gasoline and diesel tax increase that would be phased in between this October and October 2020, raising $2.5 billion more annually for road and bridge work.
Her road-funding plan is expected to face resistance in the Republican-controlled Legislature, which passed fuel and vehicle registration tax hikes that took effect in 2017 but have been criticized as not generating nearly enough revenue. Critics said the tax hikes only slowed the decline of road conditions.
Michigan now has the 9th highest combined local, state and federal gas taxes in the U.S., according to the American Petroleum Institute. Under Whitmer’s plan, it would have the highest taxes, easily surpassing states like Pennsylvania and California.
Whitmer also outlined a $507 million boost in K-12 spending , including extra funding to teach at-risk, special education, and career and technical students.
