By Brent O. Bair, Managing Director, Road Commission for Oakland County
I am writing in response to a letter about Michigan’s gas tax. The writer likely is not aware that Michigan has been among the bottom nine states in the nation in per capita state and local spending on roads for more than 45 years or that it currently is among the bottom four states.
The writer noted Michigan ranks seventh in the nation in total taxes on gas. While that is true, it does not tell the whole story — some of those dollars don’t go to roads. Michigan’s gas tax, at 19 cents per gallon, is the single largest source of road maintenance dollars for the state (followed closely by the vehicle registration fee). It is tied with two other states as having the 29th highest in the nation, below the national average and well below the rate of most other Great Lakes states. Our diesel tax, at 15 cents, ranks 42nd, one of the lowest in the nation.
Where the writer seems to get confused is with the sales tax. Michigan is one of only seven states in the nation that charges its full (6 percent) sales tax on fuel. That significantly increases the total taxes on gas, but none of the dollars generated by the sales tax goes to roads. Most of the money goes to schools, with some going to local government via revenue sharing. We voted to raise the taxes on fuel when we passed Proposal A, raising the sales tax from 4 percent to 6 percent to fund schools.
The writer is absolutely right about one point: The issue is not how much taxes are applied to fuel, but how much of those taxes is actually spent on roads.
He also questions whether Ohio and Wisconsin, which both have lower overall fuel taxes than Michigan, do a better job taking care of their roads.
What he fails to note is that both these neighboring states have substantially higher gas taxes, and thus spend substantially more on roads (Ohio’s gas tax is 28 cents per gallon; Wisconsin’s is 30.9 cents).
Should the revenue that Michigan collects from its sales tax on gas go to roads? That’s certainly a debate worth having. However, I think the reality is the state Legislature is unlikely to take those dollars away from Michigan’s schools at this point in time.
Therefore, we applaud The Oakland Press for having the courage to call for a state increase in the gas tax and vehicle registration fee. I firmly believe that this is the only way we will see an improvement in the condition of Michigan’s roads.
Independent truckers have ranked Michigan’s roads the second worst in the nation. We cannot afford that reputation if we expect our economy to recover.