Michigan now has highest gas tax in the nation

[JoeGeds]

As long as the money is used for better roads, this tax will probably save me money. I've owned my truck for 4 yrs and put 70,000 miles on it. Based on 18 mpg [[Ford straight 6 engines are frugal on gas!!), and 70,000 miles, I've purchased 3,888 gallons on gas. Multiply that by the .07-per-gallon gas tax, and it's a paltry $352.16 extra I would've spent on gas over the course of 4 yrs.
Now for the repairs I've done due to driving on these horrendous roads. Since I've had the truck: new front and rear shocks - $170. Replaced front 4X4 inner/outer bearings TWICE - $200. Two control arm brackets - $80. Front axle u-joints and both upper/lower ball joints - $305. Allignment - $80. Add that up - that's $835 in repairs. Subtract the $352 extra for the gas, and I'm still in the black $483. My registration is about $100, so 20% increase is $20 per year, or $80 for four years. Subtracted from $483 = $403. Also, all of the above repairs I did myself. If I had to pay a garage to do them, the repair costs would probably triple.
To be fair, my truck is 20 years old [[1996 F-150 4X4), so I can't quite say that the above repairs are entirely the bad roads fault. And iIdo 90% of my driving in Detroit where the roads seem to be way worse, so my example is kind of extreme. But my point is that if you sit down and do the math, most people will come out ahead.

[Atticus]

As long as the money is used for better roads, this tax will probably save me money. I've owned my truck for 4 yrs and put 70,000 miles on it. Based on 18 mpg [[Ford straight 6 engines are frugal on gas!!), and 70,000 miles, I've purchased 3,888 gallons on gas. Multiply that by the .07-per-gallon gas tax, and it's a paltry $352.16 extra I would've spent on gas over the course of 4 yrs.
Now for the repairs I've done due to driving on these horrendous roads. Since I've had the truck: new front and rear shocks - $170. Replaced front 4X4 inner/outer bearings TWICE - $200. Two control arm brackets - $80. Front axle u-joints and both upper/lower ball joints - $305. Allignment - $80. Add that up - that's $835 in repairs. Subtract the $352 extra for the gas, and I'm still in the black $483. My registration is about $100, so 20% increase is $20 per year, or $80 for four years. Subtracted from $483 = $403. Also, all of the above repairs I did myself. If I had to pay a garage to do them, the repair costs would probably triple.
To be fair, my truck is 20 years old [[1996 F-150 4X4), so I can't quite say that the above repairs are entirely the bad roads fault. And iIdo 90% of my driving in Detroit where the roads seem to be way worse, so my example is kind of extreme. But my point is that if you sit down and do the math, most people will come out ahead.

People don't know or forget that in 2016, almost 40% of the state taxes you paid at the pump were going toward schools/education. Most states do not contribute any of their gas tax to education.

With the increased portion of the gas tax all going to roads, that percentage going to schools drops closer to 30%. Still a significant amount, and while Michigan has one of the highest taxes on gas, we don't spend anywhere close the most on roads because a significant portion is still going to the schools.

And to be clear, I believe the schools in this state are very underfunded. So I am not against more tax going to schools. But when that tax is at the pump, it confuses people because they think they are paying more for roads than they really are.

[ndavies]

As someone who normally screams about tax increases, This tax change is needed. Michigan fuel tax revenue peaked in 2000. It has been falling ever since, even as the number of vehicle miles driven has increased. You can't have falling tax revenues and expect the roads to be maintained. With Vehicles being 30% more efficient than they were 20 years ago and Electric vehicles not needing gasoline, fuel sales continue to drop. With the push for electric cars we will need another way to pay for roads within the next 15 years. So while the tax rate might have changed, this will just boost tax revenues back to where they should be to keep the roads in decent shape.

And while we may have one of the highest tax rates in the country, We won't for long. Every government entity in the world who basis road construction on fuel tax revenues have the same problem.

[Honky Tonk]

People don't know or forget that in 2016, almost 40% of the state taxes you paid at the pump were going toward schools/education. Most states do not contribute any of their gas tax to education.

With the increased portion of the gas tax all going to roads, that percentage going to schools drops closer to 30%. Still a significant amount, and while Michigan has one of the highest taxes on gas, we don't spend anywhere close the most on roads because a significant portion is still going to the schools.

And to be clear, I believe the schools in this state are very underfunded. So I am not against more tax going to schools. But when that tax is at the pump, it confuses people because they think they are paying more for roads than they really are.

WOW, What a fact bomb. So, almost half [[40%) of tax collected in MI for roads and bridge maintenance is going for education purposes, and who knows what else. Lottery money revenue is going towards education. What else is being tapped into and misappropriated from the use intended? When you look @ MI high school rankings, MI ranks 28th in the country. I suppose then visitors to this forum are right, we should compare ourselves globally, and probably to 3rd world countries. @ least that way it looks like we're getting somewhere. Tax On!

[ABetterDetroit]

People don't know or forget that in 2016, almost 40% of the state taxes you paid at the pump were going toward schools/education. Most states do not contribute any of their gas tax to education.

With the increased portion of the gas tax all going to roads, that percentage going to schools drops closer to 30%. Still a significant amount, and while Michigan has one of the highest taxes on gas, we don't spend anywhere close the most on roads because a significant portion is still going to the schools.

And to be clear, I believe the schools in this state are very underfunded. So I am not against more tax going to schools. But when that tax is at the pump, it confuses people because they think they are paying more for roads than they really are.

The real stupidity kicks in when we have based a big chunck of revenues for schools [[ the 6% sales tax of fuel ) on the wildly unstable world oil markets. The Saudis decide to up the production to stick it to the Iranians and whamo! A big hole in the schools budget here in Michigan that has to be made up from somewhere else. It's almost like the idiots in Lansing try hard to set the system up to fail every time from any ripple of economic change.

[Sandhouse]

"WOW, What a fact bomb. So, almost half [[40%) of tax collected in MI for roads and bridge maintenance is going for education, and who knows what else?"

Here's what else.
Here's a table I made of all the fees and taxes on gasoline. The pump price is what I saw on the road this morning. This makes the sales tax 13.2 cents/gallon. I note that the local stations have raised their prices by almost 40 cents since I last bought gas, of which only 7.2 cents was the tax increase. [[I have labeled the gas "tax" a user fee if it goes to roads, and a tax if used for non-road purposes.)
And in case anyone notices it, this table shows the correct Michigan gasoline tax, which is only 25.9055 cents/gallon, not the 26.3 that everyone thinks it is. The 1.5% difference is left uncollected, as a favor by the legislature to the petroleum dealers to give them a bit more room for markup, because as everyone knows it's so hard to make a buck in the oil business.

	Gasoline
Pump Price, gallon	$2.599
Retail Price of Fuel before All Taxes	$2.015
Total Federal Excise Tax	0.18400
Federal Excise Tax for Roads	0.15440
Federal Excise Tax for Transit	0.02860
Federal Underground-tank Fee	0.00100
6% Michigan Sales Tax	0.13195
State Sales Tax for Schools[[73.33% of 6%)	0.09676
State Sales Tax for Revenue Sharing and Other	0.02906
State Sales Tax for Transit[[4.65% of 6%)	0.00614
Michigan Motor Fuel Tax	0.25906
State User Fee for Roads	0.23715
State Fuel Tax for Transit [[8.5% gas, 10% others)	0.02191
State Environmental Fee	0.00875
Total User Fee for Roads	0.39155
Total Tax for Transit	0.05664
Taxes for Other than Transportation	0.13557
Total of all Taxes and Fees	0.58376

[Zacha341]

Having read all of this I really do see the necessity as detailed; feel the love and realize ever more distinctly that I cannot ever purchase a new car in Michigan.

Combo: car note, high insurance, and higher taxes. Uh, no. Something has to give, not that I was hankering for that seven-year car finance plan anyway.

[Canadian Visitor]

"WOW, What a fact bomb. So, almost half [[40%) of tax collected in MI for roads and bridge maintenance is going for education, and who knows what else?"

Here's what else.
Here's a table I made of all the fees and taxes on gasoline. The pump price is what I saw on the road this morning. This makes the sales tax 13.2 cents/gallon. I note that the local stations have raised their prices by almost 40 cents since I last bought gas, of which only 7.2 cents was the tax increase. [[I have labeled the gas "tax" a user fee if it goes to roads, and a tax if used for non-road purposes.)
And in case anyone notices it, this table shows the correct Michigan gasoline tax, which is only 25.9055 cents/gallon, not the 26.3 that everyone thinks it is. The 1.5% difference is left uncollected, as a favor by the legislature to the petroleum dealers to give them a bit more room for markup, because as everyone knows it's so hard to make a buck in the oil business.

	Gasoline
Pump Price, gallon	$2.599
Retail Price of Fuel before All Taxes	$2.015
Total Federal Excise Tax	0.18400
Federal Excise Tax for Roads	0.15440
Federal Excise Tax for Transit	0.02860
Federal Underground-tank Fee	0.00100
6% Michigan Sales Tax	0.13195
State Sales Tax for Schools[[73.33% of 6%)	0.09676
State Sales Tax for Revenue Sharing and Other	0.02906
State Sales Tax for Transit[[4.65% of 6%)	0.00614
Michigan Motor Fuel Tax	0.25906
State User Fee for Roads	0.23715
State Fuel Tax for Transit [[8.5% gas, 10% others)	0.02191
State Environmental Fee	0.00875
Total User Fee for Roads	0.39155
Total Tax for Transit	0.05664
Taxes for Other than Transportation	0.13557
Total of all Taxes and Fees	0.58376

Great Chart!

For comparison purposes, this is roughly what we face on the other side of the border.

Gas price is $1.16 per litre today. This works out to $4.38 per US Gallon

Of that:

HST [[fed + prov sales tax) is 13%
Fed Excise Tax is 10c per litre [[38c per gallon)
Prov. Gas Tax is 14.7c per litre [[55.5c per gallon)
Carbon Tax is 4.5c per litre [[ 17c per gallon)

Meaning the 'base' retail cost of gas here is in the range of:

.71c per litre or 2.68 per Gallon BEFORE tax.

Meaning .45c per litre or 1.70 per gallon is the tax here.

Or tax equals roughly 38% of the price; this compares to about 20% in Michigan

I'd be interested to know why the 'base' cost is higher here

Gas Tax here is mostly 'general revenue' though roughly 3-4c is passed down to cities/regions directly. Senior levels of gov't do pay cost-shares on most 'major' projects [[subways, commuter rail etc.) as well as 100% for most major highways.

[ABetterDetroit]

Great Chart!

For comparison purposes, this is roughly what we face on the other side of the border.

Gas price is $1.16 per litre today. This works out to $4.38 per US Gallon

Of that:

HST [[fed + prov sales tax) is 13%
Fed Excise Tax is 10c per litre [[38c per gallon)
Prov. Gas Tax is 14.7c per litre [[55.5c per gallon)
Carbon Tax is 4.5c per litre [[ 17c per gallon)

Meaning the 'base' retail cost of gas here is in the range of:

.71c per litre or 2.68 per Gallon BEFORE tax.

Meaning .45c per litre or 1.70 per gallon is the tax here.

Or tax equals roughly 38% of the price; this compares to about 20% in Michigan

I'd be interested to know why the 'base' cost is higher here

Gas Tax here is mostly 'general revenue' though roughly 3-4c is passed down to cities/regions directly. Senior levels of gov't do pay cost-shares on most 'major' projects [[subways, commuter rail etc.) as well as 100% for most major highways.

I agree, Good data. I ask because I didn't see the currency conversion from Canadian dollars to US dollars. Is your math in US dollars from the start?

[Canadian Visitor]

I agree, Good data. I ask because I didn't see the currency conversion from Canadian dollars to US dollars. Is your math in US dollars from the start?

I did everything in Cdn, that I converted, while using the US number in USD that was in the chart.

Good catch, my bad:

Adjusted Below.

All numbers now in USD

Gas price is USD$.86 per litre today. This works out to USD$3.26 per US Gallon

Of that:

HST [[fed + prov sales tax) is 13%
Fed Excise Tax is [[28c per gallon)
Prov. Gas Tax is [[41c per gallon)
Carbon Tax is [[13c per gallon)

Meaning the 'base' retail cost of gas here is in the range of:

USD$2.07per Gallon BEFORE tax.

Meaning USD$1.19 per gallon is the tax here.

This mostly resolves the difference in pre-tax fuel price, though, not quite.

[ABetterDetroit]

All numbers now in USD

Gas price is USD$.86 per litre today. This works out to USD$3.26 per US Gallon

Of that:

HST [[fed + prov sales tax) is 13%
Fed Excise Tax is [[28c per gallon)
Prov. Gas Tax is [[41c per gallon)
Carbon Tax is [[13c per gallon)

Meaning the 'base' retail cost of gas here is in the range of:

USD$2.07per Gallon BEFORE tax.

Meaning USD$1.19 per gallon is the tax here.

This mostly resolves the difference in pre-tax fuel price, though, not quite.

Canada is a much closer to an apple to apple comparison to the US than France. The distances are great, the economies diverse and the population spread out without a lot of competition to move people and goods without diesel or gasoline, with the only exceptions being dense metro areas.

In Michigan, we survived 2 out of 3 bankruptcies to our auto manufactures in 1 year's time because they flat out couldn't move any of their inventory of large SUVs. Yet less than a decade later, that's practically all they make. Our roads and bridges are in extremely bad shape plus we have the largest metro area in the country with the worst public transportation system. Next up, somehow, we have the largest Metro area in the state with roughly 125 square miles of a no-go economic zone that is causing hugely expensive social problems. While at the same time, it is much more cost effective to build new in the middle of farm fields many miles from almost everything besides a strip mall, and nothing has been done to change anything with the only exception on the table being to give even larger tax breaks to the billionaires willing to develop at its very core.

Maybe its time to really consider what taxes we can afford to change instead of doing business as usual.

We get it, "You are against all taxes" because corruption in government has existed. You hate unions, and public service isn't as efficient as the private for-profit sector where anything can fail. But none of that changes the fact that we need roads, bridges, schools, police, fire depts, prisons, buses etc... This mindset denies capital improvement and drives up the cost of social issues exponentially.

I just thought maybe we could cover the usual ground quickly.

[Pat001]

Michigan’s roads have been an embarrassment for decades. Every summer there are massive road projects but nothing gets better. The state even admits this latest increase will only stop roads from getting worse.

One of the major culprits is Michigan’s gross vehicle weight limit of 160,000 lbs., which is double other states. Ever been in a car stopped on an overpass when a large truck goes past? You can feel the bridge flex in the seat of your pants. Not only are heavy trucks tearing up roads and bridges, they are involved in fatal accidents far out of proportion to their numbers.

[canuck]

Michigan’s roads have been an embarrassment for decades. Every summer there are massive road projects but nothing gets better. The state even admits this latest increase will only stop roads from getting worse.

One of the major culprits is Michigan’s gross vehicle weight limit of 160,000 lbs., which is double other states. Ever been in a car stopped on an overpass when a large truck goes past? You can feel the bridge flex in the seat of your pants. Not only are heavy trucks tearing up roads and bridges, they are involved in fatal accidents far out of proportion to their numbers.

Québec and Ontario have similar high level loads permitted. Some roadways here were fixed using polymer mixes in asphalt where too much polymer was used and the roadbed is weak. This causes canals along truck wheel treads; it is freaky to get caught up in this especially in winter when you don't see the road.

[CassTechGrad]

The 7.3-cent-per-gallon tax increase motorists began paying on Jan. 1 and the 20 percent increase in the vehicle registration tax are expected to cost road users an additional $460 million this year. The money is dedicated to transportation funding.

Yet the state transportation budget will only have $160 million more this year for road repairs, not $460 million. That is because the Legislature shifted general revenue funds out of the transportation budget just as new tax revenues were coming into it.

Since 2011 the Legislature began shifting revenue from other taxes into the transportation budget. By last year, the amount of state General Fund revenue transferred to transportation had risen to $402 million — nearly as much as the new road tax hikes will bring in this year.

With the new road tax money rolling in, all but $9.75 million worth of General Fund revenues were removed from this year’s current transportation budget. The $392 million in General Fund money that is now being removed from the transportation budget will be used to pay for increases in Medicaid and public school funding.

[bust]

The $392 million in General Fund money that is now being removed from the transportation budget will be used to pay for increases in Medicaid and public school funding.

And isn't it the case the money is being shifted to pay for public schools in large part because up to $324 million in taxpayer money that would have otherwise gone toward public schools has been diverted to the new arena?

Detroit Billionaires Get Arena Help as Bankrupt City Suffers
https://www.bloomberg.com/news/articles/2013-09-03/detroit-billionaires-get-hockey-arena-as-bankrupt-city-suffers

"Almost 60 percent of the funds to pay for the arena would come from taxpayers. Bonds would be backed by a combination of about $15 million in annual payments from Detroit’s Downtown Development Authority and $11.5 million from Olympia. Wayne County may also provide support, according to a July 24 memo.

In December, Michigan’s legislature revived the ability of the development authority to take a portion of school-tax revenue generated by property on 615 downtown acres. The money, which had gone toward economic-development bonds, would be used for debt service on a project meeting the characteristics of a new Red Wings arena.

The levy generates about $13 million, said Bob Rossbach, a spokesman for the authority.

The money otherwise would have reverted to public schools and the state’s school-aid fund, according to a legislative analysis. The state will reimburse the district to make up shortfalls, just as did before 2011, said Rossbach.

“It’s not taking money from Detroit Public Schools and putting it into economic development,” Rossbach said."

It sure looks like a giant shell game to me, with legislative obfuscations hiding the real winners from view.

[sirrealone]

They were only transferring money into the transportation budget from the general fund so that they could meet the matching required to get federal funds. That was never meant to be anything but a temporary solution.

The biggest hole that we still have is that the sales tax collected on gas doesn't go toward the roads. It explains how we collect among the highest taxes on gas yet aren't spending to the same proportion.

Remember we had a ballot proposal in place that would have fixed that. It would have directed all taxes collected at the pump, including sales tax, toward roads, and would have also raised enough [[via a 1-cent across the board sales tax increase) to keep the revenues the same for the general fund. People voted that down and complain that the issues aren't being addressed, the exact issues that the proposal would have taken care of.