The bill, which is expected to get the approval of the Republican-controlled Senate next week, will take effect on April 1 if Democratic Gov. Whitmer, the governor of the Democratic Party, does not veto it.


Several members of the Democratic Chamber unveiled the Republican Party’s proposal on Wednesday, noting that the loss of revenue will reduce funding for state roads. But House Appropriations Committee Chairman Thomas Albert R. Lowell said more than $ 4 billion in state revenue would help absorb spending.

Senate minority leader Jim Ananich, D-Flint, hopes instead to suspend a 6 percent tax on gas sales for the year, which he believes will lead to greater savings as gas prices rise. The Michigan school fund and general fund depend on state revenue from the sales tax.

It is unclear whether this or that plan will get the green light from Whitmer, who proposed a third option to reduce fuel bills. A Democrat on a first term this week has asked President Joe Biden and Congress to suspend federal gas taxes by the end of the year, but she is reluctant to support a suspension in the state of any form of gas tax.

“Right now, the best way to lower the price of gas without affecting our ability to fix the damn roads is to suspend the federal gas tax,” Whitmer spokesman Bobby Lady said Wednesday.

Talks about easing gas taxes have surfaced different states when gas prices soar across the country amid continuing inflation, Russia’s military attacks on Ukraine and Biden’s ban in response to American imports of Russian oil.

Experts said uncertainty as to when price increases will decline. “When I look at this situation, I don’t know what the end point is,” Mark Griffin, president of the Michigan Petroleum Association’s industrial group, told Bridge Michigan earlier this week.

In Michigan, the average normal price for gas is $ 4.25 per gallon as of Wednesday afternoon, which corresponds to the national average, according to American Automobile Association. That’s 26 percent more than $ 3.37 a gallon last month and 53 percent more than last year’s $ 2.78. AAA data show.

The national plan would cost the state about $ 770 million

It is estimated that the suspension of the national gas tax in Michigan will require about $ 725 million from the Michigan Transportation Fund. Fiscal analysis at home. That would mean $ 255 million in funding for public roads, $ 255 million for county road commissions, $ 142 million for towns and villages and $ 72.5 million in the State Integrated Transport Fund, the main source for public transportation systems.

In addition, it will reduce targeted funding for the repair of local and state bridges by $ 45 million, the analysis said.

Albert, who chairs the House Appropriations Committee, told reporters on Wednesday that the state should be able to absorb the fiscal impact with a revenue surplus of $ 4 billion. Meanwhile, the state has not yet allocated $ 4.8 billion in federal aid to COVID-19 under the U.S. Rescue Plan Act, he said, although federal regulations prohibit the use of those funds to pay tax cuts.

“We have more than enough cash to pay for it, so it doesn’t bother me at all,” Albert said.

So how much will the Republican plan benefit average drivers in Michigan?

On average, fuel economy for American cars was on par 25.4 miles per gallon in 2020, according to the Environmental Protection Agency. As of October 2020, Michiganers traveled an average of 10,338 miles of vehicles a year, meaning Michigan residents burned an average of about 407 gallons a year, according to data from Federal Highway Administration.

Under the Republican plan, suspending the flat tax of 27.2 cents a gallon will save the average Michigan driver about $ 111 a year.

What about the suspension of sales tax?

Ananich, who advocates suspending the 6 percent sales tax on gasoline, told Bridge that his plan would yield big savings as gas prices continue to rise. Based on the current average gas price in the state, the suspension of the sales tax will mean savings of about 25.5 cents per gallon – 2 cents less than the Republican proposal.

But as prices continue to rise, Ananic’s plan would benefit drivers.

The Flint Democrat said the state is currently getting a “non-profit” in sales tax collection due to the jump in gas prices.

Entering fiscal year 2022, the state expected to receive $ 621 million, based on a price of $ 2.84 per gallon, said Senate Democrat spokeswoman Rosie Jones Bridge Michigan. But the price has almost doubled.

“It was money we didn’t expect,” he said. “If we suspend those dollars, we can give people back their money right away.”

The Republican-controlled House of Representatives also passed an optional resolution 62-40 to call on the state to allow the Enbridge Line 5 pipeline – a pipeline in the Makinak Strait run by Canadian company Enbridge – to remain in place. The resolution says the pipeline must remain in operation to ensure “affordable” energy supplies amid volatile global oil supplies. Even if the vote had teeth, it would be unstable with Whitmer, who campaigned for the post in 2018, promising to close the pipeline.

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