With the proposed hike being considered by the lame-duck state legislature, Michigan would jump ahead of California, currently the state with the highest gasoline tax. Michigan now has the nation's fifth-highest gasoline tax, including local, state and federal taxes, at 59.4 cents a gallon. California's is 67.1 cents.
"[image-nocss] I put it down to three issues: It's too quick, it's too complicated and it's too much," Michigan Petroleum Association president Mark Griffin told the newspaper. He sent a memo to legislators Tuesday outlining his concerns.
Michigan's overall gasoline tax is 59.4 cents a gallon, based on October prices, tied with New York as the fifth-highest in the nation.
Here's how it breaks down: Federal tax: 18.4 cents per gallon. State tax: 19 cents. Other state taxes (includes 6% sales tax): 22 cents. TOTAL: 59.4 cents. "It's the last thing this ailing economy needs right now," Craig Hoppen, president of J&H Oil Co., which owns 34 gasoline stations in West Michigan, told the paper. "Cheap fuel prices are fueling the [economic] activity we have now. Taxing gasoline to fix roads is an old way of doing it."
Michigan Infrastructure and Transportation Association (MITA) spokesperson Mike Nystrom questioned the sincerity of station owners. "It's interesting to me that this industry is now so concerned about excessive fuel prices," Nystrom, whose group represents road builders and others in heavy construction, told the paper. "We didn't necessarily see memos coming out from them when the price of fuel exceeded $4 a gallon. The big oil lobbyists are no experts when it comes to the needs of Michigan's transportation network."
MITA has recommended the state eliminate the 19-cent-a-gallon gasoline tax and the 15-cent tax on diesel and replace them with an 18% fuel tax. The group also recommended a 50% jump in vehicle registration fees. The average $90 fee would jump to about $135.
The recommendations followed a report by a governor-appointed state task force that called for a dramatic increase in transportation funding. The changes would raise about $1.5 billion a year, said the report.
The state said decade-old 19-cent tax on gasoline is not generating enough money as motorists drive more fuel-efficient cars and take fewer trips.
The new 18% tax would be applied to wholesale prices, which are about $1.50 a gallon when pump prices reach $2. That would add 27 cents to the cost of a gallon. After removing the existing tax, the net gain would be 9 cents. That would put Michigan's tax about 1 cent higher than California's.
Station owners say if gasoline prices go high enough, the per-gallon state tax could more than double to 45 cents.
"My industry is taken to task when the gas price goes up; they say that we're gougers," Griffin said. "Where's the study on the profitability of road builders? Somebody's got to start asking some of these questions."
However, MITA's Nystrom said Griffin is using old information. Nystrom said the state is considering a cap to limit the state fuel tax at 23.5 cents a gallon in the first year, a 4.5-cent hike, and 28 cents the second year. "To say that the legislation would allow the tax to go to 45 cents is completely inaccurate," he said.
Griffin suggested an alternative, said the report: raise the overall state sales tax to 7% and dedicate the increase for roads.
Click the Download Now button below to see a chart of gasoline taxes by state.
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