State House Approves Road Plan

State lawmakers are slowly grinding toward a new road funding plan. The state House this week passed a $1.2 billion road funding proposal that heads to the state Senate for review. It’s being called the “600/600” plan because it calls for $600 million in new road funding and $600 million in yet-unspecified shifts from the state’s General Fund.

Revenue increases include:

  • A 40-percent vehicle registration fee increase, boosting the annual cost per vehicle to $140, plus a surcharge on electric vehicle registrations.
  • A 3.3-cent gasoline increase to 22.3 cents a gallon in fiscal 2019, and a 4-cent diesel fuel tax increase to 19 cents a gallon in FY ’18 and to 22.3 cents a gallon in ’19.
  • Automatic annual fuel tax increases keyed to the inflation rate, but limited to a maximum of 5 percent.

The House plan also expands Michigan’s Homestead Property Tax Credit starting in the 2018 tax year to provide income tax relief targeting low and middle-income taxpayers. The household income cap would rise to $60,000 (up $10,000) and increase the maximum credit to $1,500 (+$300).

The Chamber Alliance will continue to monitor road funding legislation in Lansing and keep its members advised of the latest developments. Send your comments to Government Relations Director Kent Wood at

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