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Michigan Senate approves gas tax hike after tie-breaker vote from Lt. Gov. Calley

Posted at 5:24 PM, Jul 01, 2015
and last updated 2015-07-01 18:11:37-04

LANSING, Mich. — The Michigan Senate on Wednesday approved a new plan that calls for boosting the gas and diesel tax over the next three years to raise more than $1 billion to fix the state’s roads.

The vote to increase the gas tax was tied 19-19, with a tie breaking vote coming from Lt. Gov. Brian  Calley.

The plan would raise the tax on gasoline by 15 cents over the next three years, and would tie that rate to inflation.

Under the plan, the current 19 cent per gallon tax on gasoline would increase by 4 cents to 23 cents per gallon beginning in October of this year. The rate would increase by 4 cents at the start of 2016 and increase 7 cents in 2017 effectively bring the tax on gas to 34 cents per gallon.

The same plan would apply to the diesel tax which would increase by 6 cents in October of this year, and then increase by 5 cents in 2016 and and 7 cents in 2017 to bring the total to 34 cents per gallon.

The gas tax increase alone is expected to raise roughly $700 million in revenue.

Sen. Curtis Hertel, D-East Lansing, said he could not support the bill.

“We cannot fill potholes on the backs of working families and the working poor,” he said following the vote Wednesday.

Sen. Pat Colbeck, R-Canton, voted against the gas tax increase, saying the roads can be fixed without raising taxes.

“Regrettably, the Senate ignored the Proposal 1 election results in which 80% of voters rejected a tax increase and chose the “road most traveled” by increasing the tax burden on our families,” he said.

Lawmakers in the Senate also approved a bill that would redirect $700 million in the general fund toward roads, while also triggering income tax cuts if the general funds grows by more than inflation.

Following Wednesday’s votes, the Grand Rapids Area Chamber of Commerce said in a release it applauded the Senate for approving the proposal, adding it provides for a long-term fix for Michigan’s roads.

“We are thankful that our elected leaders worked together to balance new and existing revenue on a real solution for our roads,” said Rick Baker, president & CEO of the Grand Rapids Area Chamber of Commerce. “We are also happy to see reforms such as increased warranties and competitive bidding improvements to ensure taxpayer dollars go as far as possible.”

Senate Majority Leader Arlan Meekhof said the proposal passed Wednesday was a responsible use of existing resources.

“It is simply unrealistic to assume we can adequately fund our roads and bridges without new revenue,” Meekhof said in a statement.

The Senate did not take up a vote on a controversial bill that would’ve eliminated the Earned Income Tax credit for working and poor families. The elimination of the EITC was a pivotal part of the House roads plan passed about a month ago.

The bills now head to the House for approval.