LANSING – A Michigan
Senate Republican plan to increase the gasoline tax and earmark income tax
revenue to raise funding for roads, while cutting the income tax rate if
revenue growth meets certain benchmarks, took a big step forward Tuesday with
approval from the Senate Government Operations Committee.
The
committee amended various House bills on road funding to reflect the new Senate
GOP plan and reported another bill (SB 414) to reduce the individual income tax
rate beginning on and after January 1, 2018, if the percentage in General Fund
revenue from the prior fiscal year exceeded a positive inflation rate for the
same period. The rate, now 4.25 percent, would drop by a variable amount to be
determined through a complicated formula.
That same
bill would earmark amounts of income tax revenue to be deposited in the
Michigan Transportation Fund: $350 million in the fiscal year 2016-17 and $700
million in each subsequent fiscal year through fiscal year 2032-33.
Each bill
won approval on 3-2 party-line votes with Republicans voting yes and Democrats
voting no.
HB 4609
would eliminate the Earned Income Tax Credit for tax years beginning after
December 31, 2014.
HB 4610
would specify that if townships contribute 50 percent or more to the cost of a
road project and meet other conditions, the township board require the county
road commission to use competitive bidding to contract for the work on that
project. It would also require a county road commission, if required to bid a
project, use the responsive and reasonable best value bidder process and award
the contract as such.
HB 4611
would require competitive bidding on all local road agency projects for
construction or preservation, except maintenance, costing more than $100,000
unless the agency found some other method was in the public interest.
HB 4612
would levy an additional vehicle registration fee of $30 for hybrid electric
vehicles weighing 8,000 pounds or less and $100 for those weighing more than
8,000 pounds. It also levies an additional vehicle registration fee of $100 for
non-hybrid electric vehicles weighing 8,000 pounds or less, and $200 for those
weighing more than 8,000 pounds. It also requires increases to these vehicle
fees if the tax on gasoline were increased above 19 cents per gallon.
HB 4613
would allow the state treasurer to receive money or other assets from any
source for deposit into the Michigan Transportation Fund, removing language
allowing only fuel tax and registration fee revenue to be deposited into the
MTF. And the bill would reduce the maximum amount the department may spend per
year on administrative expenses from 10 percent to 7 percent of the
distributions to the State Trunkline Fund.
HB 4615
would increase the gasoline tax from 19 cents per gallon to 24 cents on October
1, 2015; 29 cents on January 1, 2016; and 34 cents on October 1, 2017. The bill
also would increase the diesel tax to 22 cents per gallon on October 1, 2015;
to 29 cents on January 1, 2016; and 34 cents on January 1, 2017.
Beginning
January 1, 2018, it annually adjusts the tax rates on gasoline and diesel fuel
based on the lesser of 5 percent or the change in the U.S. Consumer Price
Index, rounding up to the nearest tenth of a cent. The tax could not be
negatively adjusted.
Motor fuel
taxes would also be eliminated as of January 1, 2033, under the bill, setting a
sunset, and the Department of Transportation must provide a report on various
road and construction costs by December 1, 2015 and updated July 1, 2016.
HB 4616 is
largely a technical bill in that it would amend the Motor Carrier Fuel Tax Act
to provide for fuel tax rates on motor carrier fuel purchases corresponding
with those in HB 4615.
This story
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