Diesel tax hike fuels debate
LANSING — Michigan may levy a higher tax on trucks because they’re the biggest things on the road.
The Senate Transportation Committee has voted to raise the diesel fuel tax by 26 percent, from 15 to 19 cents per gallon.
It would also eliminate a 3-cent tax incentive for diesel that contains at least 5 percent biofuel, and is expected to raise the $36 million needed for bridge repair.
“Some people think that the vast majority of damage is caused by trucks,” said the bill’s sponsor, Sen. Judson Gilbert, R-Algonac.
Gilbert cited a report by the auditor general saying the state’s bridges needed repair, but there’s no money to do the work. His legislation would make the diesel tax equal the gas tax at 19 cents. The diesel tax hasn’t been raised since 1984.
But according to Mark Griffin, president of the Michigan Petroleum Association, Gilbert’s math doesn’t add up.
“Most semi trucks run on diesel. Because they only get 5 to 7 miles per gallon, they’re already paying double or triple in taxes to use the same roads.”
And Griffin says while the proposed increase won’t directly affect noncommercial vehicles, it will hit citizen pocketbooks. He anticipates trucking companies will pass on costs to their consumers, saying, “It will make anything transported by diesel more expensive.”
Marija Bognar owns B&B Grease Trap and Drain Cleaners in Warren. Her company’s three tank trucks haul wastewater and grease from restaurants. An increased fuel tax would not help her company, she said.
“If we do anything to offset the cost, it would be to increase the price to customers,” said Bognar.
Some people take biofuel one step further and run their diesel engines on filtered fryer oil or grease, but Bognar said she hasn’t had any luck selling the grease she hauls away from restaurants.
“I’ve thought about it. It’s not pure cooking oil; it’s not fryer grease. It’s just wastewater. It’s just nasty,” said Bognar.
At one point, she put some in a jar for her brother to show somebody considering it for fuel. The smell was so bad nobody was interested.
Her trucks run on regular diesel.
Gilbert said the added revenue is necessary for bridge repair, and the type of fuel used is irrelevant.
“Whether they use biodiesel or straight diesel, you’re still using the road,” said Gilbert.
Griffin testified against the bill in the Transportation Committee, but it passed 4 to 1 and awaits action by the full Senate.
The Granholm administration supports the measure.
As far as her business goes, Bognar doesn’t expect the proposed tax hike to greatly impact the bottom line.
“It’s not something we can do anything about. We’re going to pay the tax. We’re going to stay in business.”