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Michigan: $5M to survey mileage fee to fix roads

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(The Center Square) – Michigan will spend $5 million to survey replacing the state’s waning gas tax revenue with a miles-traveled tax as more electric vehicles drive on roads but pay less to fix them relative to gas- and diesel-fueled vehicles.

The newly signed $82 billion 2024 budget directs state officials to apply for grant funding “under the national motor vehicle per-mile user fee pilot program” under the Infrastructure Investment and Jobs Act.

Upon awarded grant funding, Michigan must establish a pilot program to determine the feasibility of road usage charges to replace motor fuel taxes for transportation funding.

Gas tax revenue fixes the roads, but electric vehicles that often weigh and damage roads more pay less than owners of gas or diesel-fueled vehicles. An Anderson Economic Group report analyzing revenue loss from EV adoption found that drivers of vehicles with internal combustion engines pay, on average, $402 a year in fuel taxes and registration fees. Meanwhile, the owners of fully electric vehicles, plug-in hybrids, and hybrids pay $298, $262 and $269, respectively.

According to the Michigan Department of State, Michigan has 34,380 EVs and 143,239 hybrids registered statewide as of August 2023.

If EVs represent between 15% and 25% of new vehicle sales statewide by 2030, the report says Michigan will face a $95 million hole annually in the state’s budget. More fuel-efficient cars also reduce gas tax revenue.

Rep. Andrew Fink, R-Adams Township, said the survey is one of “many frivolous pork projects” in the state’s record $82 billion budget that increased government workers by 899.

“This ridiculously expensive and unnecessary survey is just one of the many frivolous pork projects included in the Democrats’ rapid dwindling of our state’s historic surplus dollars,” Fink told The Center Square in an email.

Analysis from the nonpartisan Michigan’s Citizen’s Research Council found Michigan Democratic lawmakers holding a political trifecta for the first time in 40 years stuffed $881 million – 65% of the $1.3 billion of 2024 budget earmarks –into the final bill that didn’t reach the executive budget or the House- or Senate-passed budget bills.

Gov. Gretchen Whitmer campaigned to fix roads but her proposed 45-cent-per-gallon tax idea failed, and Michigan still lacks good funding for road infrastructure.

Michigan’s crumbling roads have plagued residents for years, causing flat tires, road closures for repairs, and frequent traffic backups on Metro Detroit interstates. The American Society of Civil Engineers’s 2023 report card gave Michigan’s roads a D grade.

A report from Public Sector Consultants concluded Michigan has a $3.9 billion annual funding shortfall to fix roads and bridges. Another possible funding option is toll roads.

However, it’s unclear whether Michiganders surveyed will allow the government to place a GPS tracker in private vehicles because of privacy concerns.

The Center Square attempted to get more program details from the Michigan Department of Transportation; none had been received at time of publication.

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