Whitmer Rejects Gas Tax Suspension, Income Tax Reduction Bills

Michigan’s road tax on gasoline sales will stay in place, at least for now.

Governor Gretchen Whitmer on Friday promised to veto a bill passed by the Republican-controlled legislature that was designed to suspend the 27-cent-per-gallon levy for six months. However, the bill did not earn enough support in the state senate to enable it to take immediate effect. If Whitmer were to sign it, it would not kick in until March of 2023. 

The plan called for road repair money to be covered by the general fund budget. Last week, Baraga County officials were among numerous road commissions across the state to express concern that, if gas prices remain high, the tax suspension could be extended. Long-term funding from general revenues might not be reliable. The Baraga County Road Commission derives half of its budget from the gas tax.

Whitmer has called on the federal government to suspend its 18-cent gas tax, and has also proposed that Michigan suspend the 6 percent sales tax on gasoline, which is not earmarked for roads.

On Friday, Whitmer did veto a Republican tax cut plan that would have rolled the personal income tax rate from 4.25 percent down to 3.9 percent, and would have eased taxes on some retirement income. Whitmer said she will support more targeted tax decreases.

Republican State Representative Greg Markkanen said the veto “robs U.P. residents.”