Michigan Senate approves pausing state gas tax for 6 months, Whitmer mum on veto

The GOP-dominated Michigan Senate approved a bill aiming to cut the 27-cent per gallon state gas tax for six months.

The 24-14 Senate vote on House Bill 5770 pushes the bill to the desk of Democratic Gov. Gretchen Whitmer, who will likely veto it. Her office hasn’t responded to a request for comment.

The bill aims to suspend the state fuel tax on gas, diesel, and alternative fuels starting April 1, 2022, through September 30, 2022, in reaction to per-gallon prices hitting record levels.

Sen. Ericka Geiss, D-Taylor, blamed oil producers for high prices. She said the tax is needed to fix roads and bridges.

“We are still impacting the costs that the residents who drive will incur on repairing their tires, replacing their tires, repairing their axles, their suspensions, their alignments – costs that exceed any state motor fuel tax holiday,” Geiss said.

Sen. Jim Runestad, R-White Lake, said Democrats and President Joe Biden were playing the “blame game” for their own decisions, such as shutting down the Keystone Pipeline and trillions of federal spending within a few years.

“First he blamed the oil industry,” Runestad said. “Now he blames the Russia-Ukraine conflict. Playing the blame game is the only thing that his administration seems to do well.”

The GOP is pressuring Whitmer to cut taxes for Michiganders fighting 40-year high inflation and record gas prices, but the state sits on billions of dollars.

If Whitmer signed the bill into law, the House Fiscal Agency estimated the change would drop state revenue by $725 million, which would reduce the following funds:

Comprehensive Transportation Fund: $72.5 million.State Trunkline Fund: $255.1 million.County Road Commissions: $255.1 million.Cities and Villages: $142.2 million.Two additional earmarks totaling $45.4 million: revenue from one-half-cent of the gas fuel tax flows to the STF to repair state trunkline bridges, while revenue from one-half-cent of fuel tax on gasoline funds the local bridge program.

The GOP said they plan to offset the revenue loss with increased state surplus funds. However, this action would temporarily reduce road funding, opposite of Whitmer’s slogan to “fix the damn roads.”

Last week, Whitmer and five other Democrat governors called on the U.S. Congress to temporarily suspend the federal gas tax of 18.4 cents per gallon and 24.3 cents per gallon on diesel fuel.

The GOP’s proposed 27 cent gas tax break would be more than if the federal government suspended the smaller 18.4 cents federal tax since state sales tax is calculated on the transaction’s total. However, Whitmer and Democrats balked at the proposal, rightly noting it would lower road funding temporarily.

House Speaker Jason Wentworth, R-Farwell, supports the package.

“Why in the world would we write a letter to Congress asking for lower gas prices somehow, someday when we can just step up and fix it ourselves?” Wentworth said in a statement. “Michigan has billions of dollars in surplus revenue available and one of the nation’s highest state fuel taxes. The solution here isn’t complicated."