LANSING, Mich. (WLUC) - State Rep. Sara Cambensy, D-Marquette, is working on a new plan for state transportation spending with the Republican Speaker of the House.
The bills would eliminate the sales tax on fuel and replace it with an equivalent, revenue-neutral tax on fuel dedicated solely to roads. The bills also include strict protections to hold school funding harmless from any change.
Additionally, all revenue collected by the replacement tax at the pump will be dedicated specifically to local road funding, which would fill a gap left behind in the road bonding plan Gov. Gretchen Whitmer announced last month.
House Speaker Lee Chatfield says this revenue-neutral change would result in approximately $800 million annually in additional funding for the other 92 percent of roads that connect driveways to highways in every corner of the state.
The following bills are a part of the package of legislation:
• HBs 5582 and 5583, introduced by Appropriations Committee chair Shane Hernandez, and HB 5584, introduced by state Rep. Sara Cambensy, would eliminate the sales tax on fuel over three years.
• HB 5585, introduced by Transportation Committee chair Jack O'Malley, would create the revenue-neutral replacement tax on fuel.
• HB 5586, also introduced by Rep. O'Malley, would hold the School Aid Fund harmless from any change in tax collections because of this reform.
• HB 5587, introduced by state Rep. Mike Mueller, would direct all revenue collected through the revenue-neutral replacement tax to county, city and village roads.
The bills were referred to the Appropriations Committee for consideration.
Rep. Cambensy issued the following statement Thursday about the legislation package:
"This bill package focuses on getting everything consumers pay at the pump devoted to roads while holding our public schools harmless. Many constituents don't realize that Michigan sales tax paid at the pump goes directly to our schools and not our infrastructure, and they want the legislature to fix that before asking them to pay through a gas tax increase."
"I believe this step has to happen to give consumers greater transparency before we can look at long-term funding solutions or another gas tax. This bill package may also force the legislature to re-examine whether the current funding model for our schools since the passage of Proposal A in 1993 is adequate or not, and that's a question constituents and educators are also asking us. Do we need to look at a more secure way to fund our schools that is more similar to other states, rather than piece-meal it together? I think we do."
"Making sure everything paid at the pump In these bills isn't about shuffling more money towards our roads while putting less money in our schools. I don't support doing those things. But when constituents can't follow the complex road and school funding plans we have in place now, it creates a lack of trust towards elected officials when we ask for more revenue yet can't effectively explain how the current taxes are being used. I'm sensitive to that."
"This bill package is the first step towards trying to fix the transparency problem with where funding goes at the pump to fix our roads. There's still more work to be done, but I look forward to working with my colleagues on these bills in the weeks ahead."