Michigan Lawmakers OK Deal to Increase Sales Tax to Pay for Roads
Voters in Michigan will be asked in May to approve increasing the sales tax in order to fix the state's deteriorating roads and bridges.
According to the Detroit Free Press, the proposal which still needs House and Senate approval, would raise Michigan's sales tax from 6% to 7% and generate the more than $1 billion needed to fix the crumbling roads and bridges. At a news conference announcing the deal on the last day of the lame-duck legislature, Governor Rick Snyder said "nobody likes our roads. We're seeing significant damage to people's vehicles and we needed to come up with a solution."
The proposed deal calls for:
- Raising $1.3 billion per year with $1.2 billion of it going to the roads and the rest to transit.
- Removal of the sales tax from fuel sales.
- Increases in fuel taxes that would result in about a $.03 a gallon increase from the average price of fuel.
- Restoration of the Earned Income Tax Credit which was slashed in 2011 to the full 20% of the federal EITC level.
- Protection of funding for schools and local governments, which receive much of the money formerly raised from the sales tax on fuel sales. Officials say the new plan will actually increase school funding by $300 million a year.
Each chamber of the legislature will be asked to take an up or down vote on the package with no amendments permitted. That vote is expected later today.