Gas Tax on the Rise

Amy Weed, Co-Editor

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Pure Michigan is a state

H-O-L-E-S

And on its land it had some roads

H-O-L-E-S

With a bump bump here

And a bumpity bump there

Here a bump, there a bump

Everywhere a bump bump

Pure Michigan is a state

H-O-L-E-S

 

Resident drivers of Michigan can agree that the holes in our roads are wrecking our road system. We see construction everywhere, yet the roads turn into a dismal nightmare to drive on after a short time.

On November 13, the Michigan Republican-led Senate finally voted: half of the Majority Republican caucus -13 members- voted for the fuel tax bill in the Senate, joining 10 of 12 Democrats- to double the gas tax. The House Bill 5477 (HB5477) aims to raise 1 billion dollars in revenue to remake our state’s patchy pavement last for longer use.

However, while drivers will be pleased to feel a smooth concrete beneath their tires, they will cringe at the glowing red numbers at their gas station.

“It would be a gas tax increase, something nobody likes, but nobody likes the roads in a worse way. I think we took a bold leadership move in saying “We are going to fix the roads,” said State Senate Republican majority leader Randy Richardville to Detroit 4 news.

Michigan’s current flat of 19-cent tax per gallon of gasoline and 15-cent tax on diesel will be replaced with a wholesale price of gas comes April 2015.

GasTax

The expected outcome is estimated at 1.4 billion dollars. These numbers are calculated from today’s wholesale price of gasoline. The new tax goes up by percentages from 9.5%, increasing over its four years by 2.0%.

To put it into numerical perspective, if one buys five gallons a week –at the old 19-cents per gallon tax- at $2.75 a gallon for a cost of $13.75. Over the course of 52 weeks one would pay $715. Of that $715, $135.85 would go to the state of Michigan. With the new tax to go into effect in April, it would tax the whole sale of gas, so say the whole sale of gas was 2.56 –same price as before but without the 19-cent tax- it would then be $2.81 per gallon. If one buys five gallons a week at $14.05, then over the course of 52 weeks, one would pay $730.6 for gas. Of that, 182.65 would go to the state of Michigan.

To complicate the issue further, the current bill removes the 6% sales tax from gas, which will cost the programs funded by that sales tax. Education, one of the major benefactors of that tax, may take another hit in funding. Bolger, the bill’s sponsor, says the projected economic growth in Michigan will mean increased sales tax revenue that will protect schools and local governments from cuts. There is also a safety net included that translates to the revenue generated cannot be less than the previous year.

The gas prices will be groaned and tolerated by both new and old drivers alike. But with the tax-generated revenue, Michigan’s roads will be smooth and more enjoyable to drive on. After four years, no more H-O-L-E-S for pure Michigan.

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