By KEVIN WALKER
Michigan Correspondent

LANSING, Mich. — Michigan drivers, truckers and businesses that own and use aircraft should get ready to pay more for the privilege of using motor fuel.

During a lame duck session, several bills have been introduced in the state House that would raise taxes on gasoline, diesel fuel, and aviation fuel, as well as various fees for aircraft.

Instead of charging motorists 19 cents in state tax on each gallon of gas they purchase, the proposed legislation, House Bill 6749, would charge an as yet unspecified percentage for each gallon of gasoline. Under this new scheme, tax revenues would not plunge as gas prices go up, as happened last summer when prices skyrocketed to over $4 a gallon. The higher price of gasoline would help keep the tax revenues steady even as consumers felt the pinch of higher prices. Also, in one form or another higher prices would be charged on diesel fuel under the package of bills.

All of this was brought about by a lack of funds for the state’s roads, bridges and other related infrastructure, according to a transportation funding task force (TF2) that was formed last year to study the problem.

According to a report the task force issued last month, revenues for the state’s roads need to at least double in order to avoid the loss of up to $1 billion in federal transportation funds each year, starting in fiscal year 2009.

“The problem became particularly acute this year, with the rising cost of gasoline especially,” said Mike Steenhoek, executive director of the Soy Transportation Coalition.

“You saw drivers drive less and less and so less money went into the federal highway trust fund. It’s really pronounced at the state level. It’s a real acute problem. Our inadequacies on our rural infrastructure are making it more difficult to deliver grain for livestock operations. You don’t hear people talk about our gravel road system, yet these problems all eventually find their way into a farmer’s wallet.”

Mike Nystrom, a spokesman for the Michigan Infrastructure and Transportation Assoc, represents the construction industry and was a member of TF2.

“We are in the lower third of gas taxes in the nation,” Nystrom said. “The report does justify that something needs to be done.”
Ohio charges 28 cents tax on each gallon of gas, Wisconsin 31 cents and Illinois 21 cents.

Ann Jousma-Miller, economic development director for Delta County in the Upper Peninsula(UP), was also on the task force, representing agriculture.

“Michigan’s county roads have not been built to class A standards,” Jousma-Miller said. “Our infrastructure system for agriculture is absolutely vital. Michigan’s goods and services are predominantly hauled by trucks and there are a lot of trucks from Canada. Distance is also a factor in Michigan.”

She said that the distance factor is especially important in the UP, which is heavily rural. She pointed out that lumber taken from the forests in the summer is laid out at points near class A highways so that it can be hauled in the winter when county roads cannot be traveled on with any weight. “Adequate funding will encourage industry to expand here,” she said.

Motor fuel tax may increase

Speaking of trucks, House Bill 6750 will raise the tax on motor fuel for motor carriers. By eliminating an exemption for motor carriers that use 5 percent biodiesel, motor carriers would begin paying 15 cents per gallon of diesel fuel rather than the current 12 cents. There’s a push, however, to make the tax structure on diesel fuel the same as it is for gasoline.

“Publicly, there’s a demand that trucks pay an equal amount as consumers do for gasoline. There’s a push for parity,” Nystrom said.

House Bill 6751 would impact the aviation industry by imposing a number of higher fees. First, it would raise the tax on aviation fuel from the current 3 cents a gallon to 3 percent of the wholesale price. It would raise the fee to license aviation dealers from not more than $25 to not more than $100. The bill would also raise the registration fee for an aircraft from 1 cent per pound to 2 cents per pound, and double the late fee from $5 to $10 a month when an owner doesn’t register an aircraft, in addition to the initial $50 penalty.

Other bills in the legislative package include House Bills 6752 and 6753. 6752 that would affect the way funds are distributed for transportation purposes and 6753 would deal with public-private partnerships and commuter lanes.

Nystrom said he is hopeful the package of bills will be signed into law before Christmas.