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Michigan DOT: Drivers can afford gasoline tax increase

LANSING, Mich. — Drivers can afford to pay higher gasoline taxes to improve their roads, Michigan’s top transportation official said Tuesday while warning more than 125 projects will be delayed if funding is not increased.

State Department of Transportation Director Kirk Steudle estimated motorists would pay an extra 16 cents per week — “a stick of gum” — for every penny increase in the 19-cents-a-gallon gas tax. He urged lawmakers to support a proposal to convert the gas tax to a percentage tax on the wholesale price of gas, which would rise at capped amounts as prices at the pump increase.

The gas tax could be as high as 34 cents a gallon in five to seven years under the plan that has been announced but not yet officially introduced. The tax would drop slightly this year, reach 24 cents in 2010 and rise no higher than 3 additional cents annually in subsequent years.

Steudle said people do not think twice about buying a $2 or $4 cup of coffee once a week or even every day.

“This will break everybody’s back? Really? A half-pack of gum is going to break everybody’s back? Let’s put this in perspective,” Steudle told the House and Senate Transportation committees.

Yet legislators who sit on the panels said it is politically difficult to ask motorists to pay more, though they agreed more money is needed for roads, bridges and other transportation programs. The gas tax was last raised in 1997 when Republican John Engler was governor.

“We’re going to need the top leaders in our state to step up,” said Rep. Marty Knollenberg, R-Troy. “They’re AWOL. ... That’s frustrating to me.”

Democratic Gov. Jennifer Granholm, however, is for the funding plan — under which most vehicle registration fees also would nearly double over five years. So the ball is in the Legislature’s court. Hearings are expected to continue, and no action — if any — is expected until the House and Senate first approve a state budget for the fiscal year that starts Oct. 1.

To illustrate the urgency of the problem, Steudle distributed a list of more than 125 road and bridge projects around Michigan that recently were scrapped from the state’s five-year construction and resurfacing plan. The projects will be restored if funding is boosted, he said.

The state’s gas tax is paid per gallon, so when the price of gas goes up there is not more money for roads. In fact, gas tax revenue is down as people buy more fuel-efficient cars, drive less and move to other states in the recession.

The 6 percent sales tax on gas rises as pump prices go up, but that revenue mostly is designated for K-12 public schools.

Starting in the fall of 2010, Michigan could lose $763 million a year in federal transportation funding because it will not have enough matching funds — costing the state jobs, according to the state.

Kevin Jones of The Trucker staff can be reached for comment at [email protected] .