Governor Snyder, it seems, is betting that the price of gas will continue to rise, and people will then buy more fuel and vehicles.
His new plan to raise more revenue for roads consists of getting rid of the current 19 cent State tax on gas and replacing it with an additional $40 per year to register your vehicle, and tax the wholesale price of gasoline.
If the wholesale price of gas is taxed, and then consumers have to pay a sales tax on gas, the increase in revenue generated depends on the increase in gas prices.
Who wants gas prices to go up? The national debate on this is centered around more domestic drilling in order to decrease the cost of gas at the pump.
It seems to me, that if America becomes more sane in the way it produces it’s own fuels, the less money we will have for roads here in Michigan.
Most new roads built in Michigan are being funded by a one-time stimulus from the Federal Government, that has now set a higher bar in being able to fund future projects. If the consumer wins with lower gas prices, they lose with worse roads, according to this plan.
We should be working toward more drilling, more domestic oil-production, more domestic oil-refining and less regulations. Just doing that will increase the tax revenue for the roads in the State of Michigan, because people will be working more, driving more, buying more fuel, and becoming happy little consumers once again.
On a side note, right now, registration for vehicles in Michigan is based on the price of the vehicle when it was new. If you have a used vehicle, no matter what shape it is in now, you are still forking over upwards of $100 per year to register it. That is hard for lower-income working families with teens, especially since most families have two or more vehicles. Adding another $40 on to that in your birthday month is not friendly. Sure, you will pay 19 cents less per gallon, but since Snyder is betting the price will continue to rise, it is not too reassuring.