Last week Michigan lawmakers failed to pass a significant transportation funding bill that would have generated an estimated $450 million towards maintaining and modernizing the state’s transportation infrastructure.
House Bill 5477 was introduced in April 2014 as part of a package of bills to fund transportation projects throughout the state. The bill would have replaced the current 19-cent per gallon gas tax and 15-cent per gallon diesel tax with a calculation that would multiply the average wholesale gas price by 6 percent, then round to the nearest one-tenth of one cent.
HB 5477 stalled in the Senate after passing the House on May 8, 2014 with 85 in favor and 24 opposed. A last-minute compromise in the Senate that would have allowed the gas rate to rise and fall based on inflation was unsuccessful in securing support to pass the bill. If it had passed, the compromise would have been insufficient in raising the estimated $1.2 billion needed to repair and improve Michigan’s transportation infrastructure.
The legislature adjourned on Thursday for a 12 week summer break, much of which will be spent campaigning for the upcoming November election. Many say that the difficulty in passing HB 5477 partially relates to lawmakers’ reluctance to increase taxes during an election year. Senate Majority Leader Randy Richardville (R-Monroe) has stated that he will form a work group over the summer to find a solution for transportation funding.
While HB 5477 did not pass, the Senate did approve House Bill 4630, after a substitute was accepted that removed fines on overweight vehicles from the bill’s language. As passed by the Senate, HB 4630 will revise registration fees starting in 2016. The bill is expected to generate $145 million.
Another bill, House Bill 5493, was approved by the Senate on June 11, 2014 to repeal the current tax on diesel fuel and make way for a new rate as defined in HB 5477. As HB 5477 was not passed, 5493 is currently on hold.