Senate Republicans Eyeing Sales Tax Increase

By: Lindsay Veremis Email
By: Lindsay Veremis Email

"The sales tax has a lot of appeal to people because you kind of choose whether to pay it and it doesn't necessarily impact your price of gas,"

State Representative Earl Poleski, R-Jackson

A new plan to fix Michigan's roads includes an increase to the state sales tax.

Senate Republicans want to get the proposed constitutional amendment on the May ballot. That would require action by Thursday.

The measure would likely increase the tax from its current six percent, to seven or eight. It is one of several ideas being tossed around to fix the roads.

"The sales tax has a lot of appeal to people because you kind of choose whether to pay it and it doesn't necessarily impact your price of gas," State Representative Earl Poleski, R-Jackson said.

Poleski is a member of the appropriations caucus. He says the idea is moving, but faces substantial hurdles.

"To increase it does require a constitutional amendment and we have to remember that the money that goes to the sales tax is designated for specific uses such as education and local governments, good uses, but not roads," Poleski said.

The GOP Senate plan would get rid of the sales tax on gas that helps finance those areas now, and replace it with a tax on the wholesale price of fuel.

Supporter say it won't raise the price of gas, it'll just put all the tax revenue toward roads. The money schools lose in the process would be replaced by a one penny increase in the general sales tax.

"It would be a dagger to the heart of a retail community that is finally starting to come alive," James Hallan, President of the Michigan Retailers Association said.

He says it could also be a job killer, by raising the price of everything from clothes to cars.

"You're asking Michigan retailers to compete with one hand tied behind their back," Hallan added.

They prefer the user-base fee Governor Rick Snyder is calling for. Last week, he expressed concern a sales tax hike to fix roads would slow Michigan's comeback.

"I'm not signing off necessarily, no," he said. "I view it as, let's get the thoughts and ideas out there."

A constitutional amendment requires a two-thirds majority in both chambers. Given recent gridlock in Lansing, lawmakers say getting that is a stretch.


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