LANSING, Mich. – The Michigan Senate has proposed an increase to the state gas tax, in order to provide much-needed revenue to fix the state's roads. However, state business leaders argue that the increase may have unintended consequences that legislators aren't fully considering.
In particular, those opposed to the gas tax hike say that the proposal could particularly hurt gas stations along the Indiana-Michigan state line, taking economic development money away from new business ventures.
As proposed by the Michigan Senate last week, the state's gas tax will be increased by 15 cents per gallon over the next year and half. The tax would rise 4 cents this October, another 4 cents in January 2016 and then another 7 cents in January 2017, to a total of 34 cents per gallon.
The revenue from that gas tax hike, along with income tax revenue diverted from other programs, would raise $1.4 billion to $1.5 billion annually designated for fixing Michigan’s deteriorating roads.
The Michigan House had earlier passed a different proposal that would raise money through a variety of income streams, including using extra revenue reported in the May revenue estimating conference, increasing the diesel fuel tax, instituting user fees on people driving electric cars and raiding revenue that now goes into other programs like economic development.
According to news sources, Pri Mar Petroleum President Kurt Marzke has weighed in on what a gas tax increase can do to people in the convenience store/gas station business. The state’s 2002 diesel tax increase resulted in business at his company's truck stop near the Indiana border decreasing significantly as trucks fueled up in Indiana before coming into Michigan.
"A gas tax increase will hurt convenience stores and gas stations and will have a ripple effect," he told local news outlets. "I know we need to do something but there has to be a better alternative. If this goes through, Michigan will have the second highest gas tax in the country. It's not favorable for us. We need to be competitive."
A final vote on a gas tax increase could come as soon as next week.