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GOP governor to sign gas tax hike

GOP governor to sign gas tax hike
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Michigan Gov. Rick Synder (R) is expected to sign legislation on Tuesday that would increase his state’s 14.84 cents-per-gallon gas tax by 7.3 cents to help pay for transportation projects, The Detroit News reports

The new Michigan fuel levy, which would be the state's first increase since 1994, will be collected on top of an 18.4 cents-per-gallon federal gas tax that is charged to all drivers in the nation to fill the federal government’s transportation funding coffers and 19 cents per gallon in additional state excise fees on fuel purchases. 

The American Petroleum Institute says the gas tax increase will bring the total amount of money that drivers in Michigan are charged at the pump to nearly 60 cents per gallon.  

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Synder has said the gas tax increase will be "good for our economy, strengthening the network of local, state and federal roads that is vital for all of our job-creators." 

"This is the largest investment in Michigan roads and bridges in more than half a century, making them safer for Michiganders long into the future," he said in a statement about the pending legislation. 

"I commend my partners in the Legislature for their resolve and their willingness to compromise," he continued. "These are difficult decisions. If left unaddressed, our infrastructure problems would have grown more expensive to fix, there would have been greater damage to our vehicles and, more importantly, more drivers left to face unsafe conditions." 

Michigan is the latest to move to increase its own gas taxes in recent years amid uncertainty about the future of federal transportation funding. Six states implemented such hikes on July 1. 

Lawmakers in Congress are currently facing a Nov. 20 deadline for the expiration of federal transportation funding. Both chambers have passed bills that contain three years of guaranteed highway funding, but the clock is ticking as they try to hash out a bicameral agreement on the measure in the next two weeks. 

Transportation advocates in Washington have pointed to the willingness of states like Michigan to raise their own gas tax as evidence that a national hike would be politically palatable this year. 

Conservative groups in Washington have made clear that they would consider an increase in the federal fuel levy a tax hike, however, and Republican lawmakers have ruled out such a hike.

The national gas tax has been the traditional source of transportation funding since its inception in the 1930s. The tax has not been increased since 1993, however, and improvements in auto fuel efficiency have sapped its purchasing power. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in approximately $34 billion annually at its current rate. 

Lawmakers have turned to other areas of the federal budget in recent years to close the $16 billion per year gap, but transportation advocates have said the resulting temporary funding measures are preventing states from completing large construction projects. 

The Congressional Budget Office (CBO) has projected that it will take about $100 billion, in addition to the annual gas tax receipts, to pay for a six-year transportation funding bill.