Michigan lawmakers pursue road-usage tax

The state of Michigan is the latest state to pursue implementation of a voluntary mileage-based user fee, or road-usage tax.

Democratic state lawmakers have included $5 million in proposed budget bills to develop and implement a road-usage tax study. The voluntary pilot program would be funded with money from the state’s general fund.

Starting in June 2025, the mileage-based road-usage tax would have participating Michiganders pay by the mile driven rather than by the gallon of fuel purchased.

Turning a blind eye

Opponents have contended the proposed transportation budget that focuses on a road-usage tax turns a blind eye to local road needs.

Rep. Tom Kunse, R-Clare, lamented that the budget includes what he described as nearly $18 million for aerial drones and electric bike incentives.

“Our roads are costing people money; it’s as simple as that,” Kunse said in prepared remarks.

On this week’s edition of the Talking Michigan Transportation podcast: Could Michigan shift from fuel taxes to road user charges to fund roads? https://t.co/yqQ6n3KaYD pic.twitter.com/Z6hpLtQl1s

— Michigan DOT (@MichiganDOT) May 9, 2024

‘Not getting it done’

During a recent Michigan Department of Transportation podcast, Baruch Fiegenbaum of the Reason Foundation said the state fuel tax “is just not getting it done.”

“Because of the improvements in fuel efficiency of conventional vehicles and also the growing number of hybrid and electric vehicles, it’s just not a fair way to fund roadways going forward,” Fiegenbaum said.

The County Road Association of Michigan backs the road-usage tax study. The group said the state is “lagging behind” on transportation funding.

A recent report from the group found Michigan would need $2.4 billion of additional funding to meet goals of fixing county roadways throughout the state. Overall, the state faces an estimated $3.9 billion annual deficit in road funding.

The group also highlighted that none of the state’s sales tax paid at the fuel pump is used for road work.

According to the road association’s X account, nearly all of the sales tax collected on fuel goes to schools and local government. LL

More Land Line coverage of Michigan news is available.