Michigan Road Funding Bhavdeep Singh

Roads Roads in the state of Michigan are some of the worst roads in the country. Why do our roads get so bad? What would happen if we didn’t fix them year after year? Where does the Money come from?

Sales Tax In arguing for increasing Michigan's 6% sales tax to 7% on the May 5 statewide ballot as part of a road funding plan, the Republican governor said if nothing is done the percentage of state highways in good or fair condition is expected to fall from 82% last year to 44% in Michigan has some of the country's highest taxes at the pump but spends less on transportation than other states because the sales tax applied to fuel mostly goes to education and local governments under the state constitution.

Sales Tax vs. Excise Tax Sales Tax is applied to almost all sales Michigan is one of the few states that also pays a sales tax on gasoline. Excise Taxes are purely based on usage and are only paid by the user of the good Typically sales taxes are utilized for numerous things (i.e. education) Excise Taxes are used for things that individuals who pay the tax would benefit from

National Funding Chris Hundt, an MDOT transportation planner, said recently reintroduced legislation to increase the 18-cents-a-gallon federal gas tax by 15 cents would keep afloat the Highway Trust Fund without needing to take money from other federal accounts. Problem…Michigan wouldn’t receive a lot of it because people drive less and with more fuel- efficient vehicles while paying per-gallon gas taxes unchanged for two decades

Effective Plan Eliminating sales tax from gasoline purchases and increasing it as stated earlier Increasing the state's gallon gas tax to make up for sales tax elimination Gasoline prices stay the the same in the short run Sales tax is used for other things Gas tax will be utilized to generate $1.3 billion more a year for roads, bridges and public transit.

Tax

Graphical Breakdown of Tax