(Published 03/09/2022 - MIRS.news) Michigan's 27.2-cent-per-gallon gasoline tax would be suspended for six months in an attempt to lower gas prices amid the price surge caused by Russia's invasion of Ukraine, under legislation House Republicans pushed through Wednesday, 63-39.
The amended version of HB 5570 would save drivers $5.44 when they fill up a 20-gallon tank. It counts on the $750 million lost in road funding to be made up through the $4-$5 billion General Fund surplus, although that is not specifically in the bill. The Senate is expected to take the legislation up next week.
The suspension would be between April 1 and Sept. 30, meaning the price of gas would go back up a month before the Nov. 8 election.
AAA has put the Michigan average for a gallon of regular gasoline at $4.245 a gallon, up from $4.18 on Tuesday, $3.369 from last month and $2.78 from a year ago. In history, the highest average gas price ever recorded in Michigan was $4.26 a gallon in May 2011. Metro Detroit surpassed its highest total of $4.24 a gallon earlier today, according to AAA spokesperson Adrienne Woodland.
Several Democrats voted against the bill on the argument that it's not fiscally responsible to take money away from roads, saddling local governments with a big problem. Rep. Samantha Steckloff (D-Farmington Hills) said the hole in the budget is going to be filled through more local millages unless the "rumor" of the $750 million backfill is put in the bill.
Democrats voting for the bill were Reps. Darrin Camilleri (D-Brownstone), David LaGrand (D-Grand Rapids), Sara Cambensy (D-Marquette), Shri Thanedar (D-Detroit), Terry Sabo (D-Muskegon, Kevin Hertel (D-St. Clair Shores), Angela Witwer (D-Delta Twp.), Alex Garza (D-Taylor) and Jim Haadsma (D-Battle Creek).
"This piece of legislation is a piece of candy. It tastes really sweet, but it's going to dissolve quickly," said Rep. Lori Stone (D-Warren). "This is not a solution."
But Rep. Steven Johnson (R-Wayland Twp.) said with a $4 billion state government budget surplus, the state is more than in a position to absorb the loss.
"The state coffers are more flush than ever before. I assure you that those of the hard-working Michiganders are not," Johnson said.
Gov. Gretchen Whitmer did not attend the lengthy closed-door Democratic caucus as it tried to decide how to handle this GOP surprise gas tax freeze. However the Governor's chief of staff and budget director Chris Harkins did show up and laid out the financial implications of this move, which essentially boiled down to taking money from other budgets to pay for the lost revenue.
Later in the day, the Governor's press shop released the following statement, "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.
“As Michiganders continue to feel the pinch of higher costs, it's more important than ever before for the Legislature to pass Governor Whitmer's plan to eliminate the retirement tax to save seniors $1,000 per year on average and cut taxes for working families to put $3,000 back in people's pockets each year.”
Earlier in the day, House Speaker Jason Wentworth (R-Farwell) told TV-6 Lansing, "We're committed to back- filling this. We have $4 billion in the General Fund. Our state is in a very good fiscal position right now to provide this relief for families."
The proposal comes a day after Gov. Gretchen Whitmer joined five other Democratic governors in urging Congress to pass legislation to suspend until year's end the 18.4-cent-per gallon federal gas tax. Republican gubernatorial candidate James Craig urged her to advocate to suspend the state's gas tax a day prior. Republican candidate Michael Brown has also called for the suspension of the gas tax.
Democrats tried to reconsider the vote by which HB 5570 passed to hold up the bill, but they failed.
Earlier in the day, Senate Majority Leader Mike Shirkey (R-Clarklake) advocated for the bill's quick passage considering the price jump at the pump.
"Instead of using her pen to write letters to Nancy Pelosi and Chuck Shumer, Gov. Whitmer should use it to sign the bill cutting taxes for every Michigander that's collecting dust on her desk," said Shirkey in the announcement. "This is a serious situation that requires more than letter writing and the magnanimous gesture of asking someone else to foot the bill."
