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Lawmakers consider road usage tax to replace gas tax

LANSING -- Michigan lawmakers are considering a future-proof way to raise funds for road maintenance.

A mileage tax, also known as a road use tax, collects revenue by determining how many miles each driver travels within the state.

“It is really an equitable way of charging a user fee for all vehicles on the road,” said Lance Binoniemi, VP of government affairs at the Michigan Infrastructure and Transportation Association.

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If implemented, the policy would likely replace or significantly reduce the state gas tax, which currently adds $.30 per gallon and brought in over $1.4 billion for the state in 2023.

The plan is far from a potential widespread implementation — the House recommends $5 million for a program pilot in the annual state budget, though that recommendation is subject to changes in the coming weeks. Exact rates would be determined with information from a future volunteer pilot program.

Supporters say that if a driver is putting more wear and tear on the roads than others, they should have to pay a higher amount to the agencies that maintain those roads.

“Unfortunately, as vehicles become more fuel efficient and as more electric vehicles become on the scene, we have less revenues from the gas tax,” Binoniemi said. “Which means we have less revenues that are going into our roads and bridges.”

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Supporters say that EVs and fuel efficient vehicles present a threat to the current gas tax which state leaders should be proactive in addressing. While gas tax revenue remains high, experts predict that figure will decrease in the coming years.

The state does have some measures already in place to collect revenue from EV drivers. EV owners must pay an additional registration fee for their vehicle — $50 for plug-in hybrids and $140 for fully electric vehicles.

The program has been tested in over a dozen other states, though no wide-scale permanent program has been implemented in the US.

The main concern for opponents of the policy is privacy. Since the program needs to collect information on the number of miles driven by each driver, some sort of tracking mechanism would need to be implemented.

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“I’m not going to support any plan that’s going to allow the government to track our movements,” said Rep. Ken Borton, R-Gaylord.

Advocates have proposed a GPS system or a mileage-based odometer as means for collecting data on distance traveled. In Oregon, a state with a mileage tax pilot program, mileage tracking is offered as a service by private and public organizations. Some require GPS tracking, while others allow for non-GPS options.

But some policymakers say they still have concerns about the necessity of installing an external device in one’s vehicle.

Borton also shared concerns about interstate travel, which he said isn’t accounted for under current mileage tax proposals.

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“We need to make sure that everybody who is using the roads, putting wear and tear on the roads, is helping to maintain those roads,” he said.

If approved, a pilot program would kick off this fall.

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