The House of Representatives passed legislation providing an additional $3.1 billion for roads and bridges throughout Michigan. All experts agree that Michigan needs a significant influx of annual spending on infrastructure, but over the past several years, questions over where to get the additional funding have persisted.
The Funding Proposal Breakdown:
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- $1.1 billion from tax changes paid by certain businesses.
- $945 million from dedicating all taxes paid at the pump to roads.
- $600 million from increased revenue from higher tax returns.
- $500 million from spending cuts.
The Legislation:
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- Removes the sales tax on fuel and replaces it with a motor fuel tax.
- Earmarks $750 million of sales tax revenue to the School Aid Fund to replace the losses incurred from removing the gas tax.
- Increases the tax rate for businesses that had legacy credits under a prior tax from 4.95% to 30%.
- Creates the Neighborhood Road Fund, providing funding to local governments for roads and bridges based on the number of road miles.
- Ends certain economic development grant programs and ends funding to the Strategic Outreach and Attraction Reserve (SOAR) fund.
Next Steps:
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- House Bills 4180 – 4187, and 4230 will be sent to the Senate for consideration.
For a full analysis of the proposal, please click here to read an overview by the nonpartisan House Fiscal Agency.
