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Snyder suggests $120-a-year hike in car registration fees - detnews.com

Thursday, October 27, 2011   (0 Comments)
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Lansing  — Gov. Rick Snyder suggested Wednesday a $10-per-month increase in the cost of registering a typical vehicle in Michigan, which would raise an additional $1 billion in revenue for road fixes.

The idea was unveiled as part of a far-reaching strategy to stabilize transportation funding and improve Michigan's roads, public transit, Internet and sewer systems.

"I want a public discussion on these issues," Snyder said. "I'm not proposing anything specific to the Legislature. But, for example, if we increase state vehicle registration fee by $10 per month on the average vehicle, that would raise about a $1 billion."

Snyder's message comes at a critical time. Michigan's roads are considered bad and deteriorating, yet there seems to be little appetite in the legislature to raise the gasoline tax for which the state collects much of its road-improvement money. Because that tax is 19 cents per gallon, when fewer drivers travel fewer miles in more efficient cars it amounts to less money for road fixes.

Snyder's infrastructure message Wednesday also called for more control over county and municipal road funds — including the ability for counties to assess $40 vehicle registration levies, if approved by voters — and for a restructuring of how Michigan pays for its state road and bridge program.

In a Special Address to the Legislature on Infrastructure at Lawrence Technological University in Southfield, Snyder also called for improvements to Internet access and local transit, including rapid transit in Southeast Michigan.

Among the highlights, Snyder proposes:

Allowing counties and regions to levy vehicle registration fees of up to $40 for street repairs. The levy would require local voter approval, and would be in addition to state vehicle registration fees.

Eliminating the 19-cents-per-gallon Michigan gas tax paid by motorists at the pump, and replace it with a 6.7 percent tax on wholesale gasoline and diesel fuel.

A new fiber optic cable across the Mackinac Bridge to increase Internet access in the Upper Peninsula.

Competitively bidding out maintenance services, engineering or construction of roads.

Accessing federal money for dredging ports around the state.

Helping to make money available to communities to maintain or improve water quality.

Prioritizing efforts to remove problem dams.

Moving to a wholesale gas tax would bring in more funds to fix roads and bridges as inflation pushes up the price of gasoline and diesel fuel, Snyder said.

Snyder also suggested giving counties and regions the authorization — with approval of the voters — to levy a supplemental vehicle registration of up to $40 per vehicle, which Snyder estimated would raise an additional $300 million, with the funds to be spent on roads and bridges within the county.

Currently, vehicle registrations are based on the value of the vehicle (for models 1984 and newer); with older vehicles taxed on their weight. The Michigan Secretary of State estimates vehicle registration fees bring in about $950 million a year.

While Franklin resident George Haddad characterized Snyder's talk as a "contemporary Gettysburg Address," he nixed the idea of a county vehicle registration fee.

"My answer is no," Haddad said. "I think they're trying to dissect the problem from the wrong end. There is still plenty of fat in the cumulative budgets … rather than tax for more money."

Convincing Republicans in control of the House and Senate may prove challenging for the governor. Former Gov. Jennifer Granholm, a Democrat, proposed a tax on the wholesale price of fuel, but the Legislature was cool to the idea.

Mike Nystrom, executive vice president of the Michigan Infrastructure and Transportation Association, said his group is happy the governor offered long-term solutions to the state's infrastructure problems.

"We hope the House and Senate will follow the governor's bold leadership, and we look forward to working with the governor and Legislature to pass this long-awaited, long-term funding solution," he said in a statement.

Michigan's road funds have declined as consumers have cut back on purchases as gasoline prices spike as high as $4 a gallon. A wholesale tax would allow revenues to rise or fall with changing fuel prices instead of tying gas tax revenue to consumption. Michiganians would still have to pay an 18-cent federal tax and a 6 percent Michigan sales tax on every gallon purchased.

Michigan spends roughly $3 billion annually on roads, and a study released in September by House Republicans concluded the state needs to invest an extra $1.4 billion annually, rising to $2.6 billion per year by 2023, to meet the minimum long-term costs to maintain its roads.

Michigan has been steadily raising less money each year for roads as motorists drive less or switch to electric or more fuel-efficient vehicles. The state gasoline tax was last raised in 1997.

If too little state money is invested, Michigan could lose roughly $400 million in federal road funds next year.

According to the Michigan Section of the American Society of Civil Engineers, Michigan is still not making the grade after it received an overall "D" rating for infrastructure two years ago.

According to a report from the group, to delay the repair of roads and bridges within the state, and the rest of the country, would cost individual families $1,000 per year in repairs, increased cost of goods and time delays.

Tim Fischer, deputy policy director with the Michigan Environmental Council, liked what he heard from the governor, but isn't sure if his recommendations will fly with the state Legislature.

"He's quite right that the funding scheme we're dealing with right now was built for the 1950s," said Fischer, whose group represents environment and public health groups across the state.

"But we have a block of legislators who have made pledges against new taxes, although this is not necessarily a tax increase.

"How they view this will be interesting to see."