TRAVERSE CITY — On January 1, Michigan will eliminate its 6% sales tax on gasoline and replace it with a higher cents-per-gallon fuel tax.
The change raises the state gas tax from 31 cents per gallon to about 52.4 cents which the state said will only raise the price of gas to a little more than a penny.
“What do you think about that tax increase? I think that’s stupid,” said gas buyer Debra Chemisky.
State officials said the shift creates a more reliable funding source, with every dollar collected dedicated to roads and bridges.
Governor Gretchen Whitmer said the change supports nearly $2 billion a year in road investment.
But drivers like Tim Sorg have mixed reactions.
“I’m not typically in favor of paying more taxes, but if it significantly improves road conditions in Michigan, and that’s what it’s used for, then I’m okay with it,” said Sorg.
Some worry about accountability and affordability.
“When they do something like this, it is going to hurt the people that are still struggling with high expenses and things other than just gas,” said Joseph Matt.
To help pitch in for Michigan roads drivers of electric and plug-in hybrid vehicles will see higher registration fees of about $50 more for plug-in hybrids and $100 more for fully electric vehicles to help offset their reduced fuel tax contributions.
Some drivers question whether the money will be spent on what was promised.
If it truly goes to improving the roads, then that would be a good thing,” said Sorg.
State officials estimate the changes will generate millions in additional revenue for transportation projects.
Whether drivers see smoother roads ahead or just higher costs remains to be seen.