LANSING, Mich. — Michigan’s legislative leaders and Gov. Rick Snyder have reached a deal to provide additional funding for the state’s roads.

The linchpin for the multi-bill package is a ballot measure to be held this coming May, in which voters will be asked to raise the state sales tax from 6 to 7 percent. That is expected to raise $1.34 billion a year. It would eliminate the 6 percent sales tax on fuel, losing $752 million a year.

A wholesale tax on motor fuels would start Oct. 1, 2015, which is expected to generate $1.2 billion. Elimination of the sales tax on fuel, coupled with a new tax on motor fuels, would ensure those tax revenues would be used for transportation. Sales taxes on fuel are not necessarily used for road funding.

The plan would also increase registration revenues by ending the 10 percent rollback that new car owners now get for three years after buying a new car, generating an additional $45 million from vehicle owners and $50 million from heavy trucks. Registration fees for commercial trucks would be raised, as well as those for hybrid and electric vehicles. Otherwise, registration fees for cars and light-duty trucks would not be raised.

The deal was reached early on Dec. 19. Those negotiating with Snyder included state Sens. Randy Richardville and Gretchen Whitmer, and Reps. Jase Bolger and Tim Greimel.

“We support the plan that passed the legislature this morning and is consistent with Michigan Farm Bureau’s (MFB) member-developed policy on transportation funding,” said Andrew Vermeesch, MFB associate legislative counsel. “This plan is a step in the right direction, toward finding a solution for fixing our crumbling roads and bridges.”

He said Michigan’s agricultural sector relies on a sound transportation network for moving agricultural products from farm to market, and that MFB members have long advocated an increase in funding for the state’s transportation system. He added the MFB supported discussions by the governor as well as the leadership in both chambers to find a funding solution to address transportation funding shortfalls.

What “came out of those discussions was legislation that was consistent” with MFB member developed policy, he said.

County Road Assoc. of Michigan Executive Director Denise Donahue took a similar tack regarding the plan, saying the group doesn’t care what mechanism the legislature uses to get the funding for more road repair and maintenance. “The sooner we get the money, the better,” she said.

Other provisions tied to the bill package include restoration of the state earned income tax credit (EITC), which was cut by two-thirds as part of Snyder’s bid to lower taxes for business and balance the budget early in his first term. It would be raised back up to 20 percent of the federal EITC.

The deal would also protect funding for schools and local governments, which get much of the money raised from the sales tax on fuel sales.

Not everyone is in favor of this deal. According to the free market-oriented Americans for Prosperity (AFP) activist group, Michigan drivers will pay 23 cents more per gallon of gas under the plan. That would put Michigan in the top five states with the highest gas taxes and give it the highest excise tax in the nation, said Annie Patnaude, AFP’ deputy director.

She said since the new excise tax would be set up as a percentage of the wholesale price of gas, there would be automatic tax increases tied to the price of gas in the future. “We don’t think that the lawmakers need to come back to the taxpayers for more money to fix the state’s roads,” she said. “The people’s money could be spent more wisely.”

Patnaude added the multi-bill package is basically “Christmas tree legislation,” meaning something for everyone, not just money for roads.

Also, Senior Director of Tax and Regulatory Reform for the Michigan Chamber of Commerce Tricia Kinley said that group is disappointed by what the legislature did in handing off the decision to voters in the form of a ballot measure. However, Chamber isn’t taking a position on the measure itself at this time.

“We are going to do our due diligence before taking a position on it,” Kinley said. “This package is complicated.”