Snyder signs road-spending bills with tax increases
ALAIEDON TOWNSHIP — Governor Rick Snyder signed a road-spending package into law Tuesday that includes the first increase in decades in Michigan's fuel tax and vehicle registration fees, a move designed to address the deteriorating highways, roads and bridges across the state.
The legislation raises the 19-cents-a-gallon gasoline tax by 7.3 cents and vehicle registration fees by 20 percent in 2017, with automatic annual inflationary adjustments in fuel taxes in 2022 and after. It also permanently shifts existing state funds toward road work starting in three years.
Michigan's net annual spending increase will total $825 million within five years, a 19-percent boost to the overall $3.9-billion transportation budget and a 31-percent jump in state funding.
"This is the largest investment in transportation in Michigan in the last 50 years," Snyder said. "Let's remember that and let's be proud of that."
The Republican governor signed the bills at the Michigan Infrastructure & Transportation Association, a construction trade group based near Lansing. The measures passed the GOP-controlled Legislature last week with almost all their support coming from Republicans.
The action comes as states around the country struggle with deteriorating highways and how to pay for fixing them. About one-third of the states have approved measures this year that could collectively raise billions of dollars through higher fuel taxes, vehicle fees and bonds to repair old bridges and roads and relieve traffic congestion.
In neighboring Wisconsin, lawmakers approved last week $350 million more in borrowing for major road construction projects. Indiana is considering whether to divert $250 million from reserves, while borrowing another $250 million to rehab its highways.
Majority Republicans in both states have come under criticism for not coming up with adequate long-term solutions to fund transportation.
The Michigan legislation also makes more homeowners and renters eligible for an expanded property tax credit starting in 2018. Income tax cuts could be triggered later if general fund revenues grow by a certain amount.
Snyder first called for a comprehensive road-improvement plan four years ago, in his first year of office. Lawmakers agreed nearly a year ago to higher fuel and vehicles fees, contingent on voters approving a sales tax increase. But in May voters resoundingly defeated the proposed 1-percentage-point increase in the sales tax to boost spending on roads, education and municipalities.