Michigan could potentially have the nation’s highest gas tax if Gov. Rick Snyder’s proposal to replace the state motor fuel tax with a higher wholesale tax becomes law.
As of Jan. 1, motorists here pay 57.8 cents per gallon worth of state and federal taxes, according to the American Petroleum Institute. This includes the 6 percent Michigan sales tax imposed on fuel sales, from which not a dime goes to roads (a small amount goes to subsidize public transportation). Michigan is one of only eight states that impose sales tax on fuel.*
The new tax would replace the current 19-cent Michigan motor fuel tax on gasoline with a wholesale tax, initially levied at an effective rate of 28.3 cents per gallon – an immediate 9.3-cent increase. Assuming no other changes, this would put government’s total take per gallon here at 67.1 cents, making Michigan the second highest after New York (67.4 cents) with Connecticut and California tied for third (67.0 cents). Get the full story from CapCon here.
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That 6% sales tax on gas, that doesn't go to roads, mostly goes to schools. Its worth about $700 million. So we don't have a road funding crisis. We have a road funding diversion and a school funding crisis. So we have to raise the gas tax for schools, not roads.
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