LANSING, Mich. – Gov. Gretchen Whitmer on Friday proposed temporarily freezing Michigan's 6% sales tax on gasoline and diesel fuel as a way to lower high pump prices and keep intact road and bridge funding.
The Democratic governor's statement came as she told legislators she will veto Republicans' attempt to suspend for six months a different tax at the pump — the 27.2-cents-per-gallon gas and diesel levy.
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“A short-term pause is a fiscally-responsible action we can take that will provide drivers relief at the pump right now — not next year — while also protecting funding for road repairs and save tens of thousands of good-paying construction jobs,” said Whitmer, who has also urged Congress to freeze the federal 18.4-cents-a-gallon gas tax and 24.4-cent diesel tax.
“While I am open to negotiating on alternative proposals, I will not support legislation that jeopardizes road repairs, construction jobs or funding for local schools," the statement said.
The governor did not specify how long the fuel sales tax should be suspended.
Leaders from both parties in the Republican-controlled Senate are open to eliminating or pausing the sales tax on fuel. But Republican House Speaker Jason Wentworth is not on board, saying motorists would save more if the per-gallon tax is halted, especially as prices fall.
Sales taxes collected at the pump primarily go to schools and municipalities. Whitmer indicated that school funding could be protected if a deal is reached.
The statewide average price of a gallon of regular unleaded gas was about $4.18, down from a record high of $4.26 just over a week before, according to AAA Michigan. It was up from $3.37 a month ago.
Legislation that would freeze the per-gallon tax from April through September won final approval earlier this week but has not been transmitted to the governor. Senate Democrats withheld support for giving the bill immediate effect. That means it would not go into law until 2023 and at that point might be meaningless.
“The governor isn't just a day late and a dollar short on this issue. She's weeks late and millions of dollars short,” Senate Majority Leader Mike Shirkey, a Republican, said in a statement that accused her of being “absent” on the issue of gas prices besides writing a letter to congressional leaders. “Now she's proposing a half-measure that won't save drivers as much as the bill we've already passed.”
The nonpartisan Senate Fiscal Agency estimates Michigan drivers on average buy 557 gallons a year. They pay $151 in state per-gallon taxes and, at current prices, $125 in sales taxes at the pump.
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