LANSING, Mich. — Lawmakers are looking to ease the burden of soaring gas prices by potentially suspending the state gas tax. Those conversations are happening in several states, including Michigan, where a bill could be on the governor’s desk by next week.
But how would that impact the cost you pay at the pump? And how would it impact the state’s budget?
Every time you fill up, you’re not just paying for the gasoline; you’re paying a little extra.
As of Thursday, a gallon of gas in Michigan costs $4.26 on average, according to AAA data.
If you have a 15-gallon tank, you’re paying about $64 to fill up, nearly 16% of which is in taxes.
There’s an $0.18-per-gallon federal gas tax, a $0.27-per-gallon state gas tax and the 6% Michigan sales tax.
On Wednesday, Michigan House Republicans fast-tracked a bill to suspend the state gas tax for six months.
“We actually have the power here to reduce gas prices by 28 cents a gallon, for every Michigander. Think about that. Think about the extraordinary effect that's going to have on those struggling to make ends meet,” State Rep. Steve Johnson (R–Wayland) said.
Some Democrats joined the Republican-led house in approving the measure, but others say it’s not worth the blow to the budget, with no set plan on how to replace the funds lost.
“This legislation is a piece of candy. It's gonna taste really sweet, but it's going to dissolve quickly,” State Rep. Lori Stone (D–Warren) said in opposition to the bill.
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Analysis of the bill shows if signed into law, the state will lose more than $725 million in revenue. Gas tax revenue goes directly to the Michigan Transportation Fund, which pays for road repairs.
Republican legislators say they could refuel the transportation fund using general fund money.
“The state coffers are more flush than ever before. We've got an extra $4 billion sitting there in the general fund. This is $750 million. Just a portion of it. Our budgets are flushed with cash,” Johnson added.
The bill now heads to the Senate and could be on Governor Whitmer’s desk by the end of next week, but the governor's office alluded in a statement they worry the proposal could hamper road work.
“Governor Whitmer is always working to lower costs and save drivers money. Right now, the best way to bring down the price of gas without impacting our ability to fix the damn roads is by suspending the federal gas tax,” says Spokesperson Bobby Leddy.
Whitmer was among a group of governors to call on Congress this week to suspend the federal gas tax for the rest of the year, which would save drivers $0.18 per gallon.
Several other states are having these same discussions; so far, Georgia, Florida and Maryland are making moves to suspend the gas tax in their states.
READ MORE: Interactive Map: Check average gas prices by county in Michigan
