Hundreds of local municipalities across Michigan are getting an infusion of tax revenue to repair roads, generated by property tax levies approved by their voters.

For example, Hamburg Township in Livingston County collected $993,000 in 2018-19 from a voter-approved local road millage that took effect in 2017. The road tax revenue exceeded the $833,000 in general property tax revenue the township collected that same year.

There are 644 local government units in Michigan that levy a dedicated road millage. The Mackinac Center for Public Policy was able to track down the amounts collected by 570 of those millages by looking at local government financial reports. Those 570 property levies generate about $151.5 million a year. This local money is above and beyond the $3.6 billion in state tax revenues being spent on transportation this year.

The largest annual road millage levied by a local unit of government last year was $6.5 million in the city of Warren. A road millage in the city of Southfield brought in $6.2 million, and Washtenaw County’s road tax generated $6.1 million a year.

A report released by the Citizens Research Council of Michigan suggests the state should let municipalities try alternative road funding options, and expand their authority to enact new taxes for the purpose. These taxes could include local income, sales, vehicle registration and gas taxes.The report predicted that more communities are likely to seek voter approval for road millages, and that this could strain governments’ reliance “on the overburdened property tax.”

"We don’t have a position about what to do about the 700-plus local millages currently levied for roads," said Craig Thiel, research director for the Citizens Research Council. "In the immediate term, many of these millages probably could not be replaced by another tax option (e.g., pledged for debt service), but we could see a future scenario where a county or municipal government, given the option, would opt to generate funds to address local road needs from something other than a dedicated property tax millage."

Thiel added: "... providing additional options does not mean that local decision makers will automatically be able to levy a new tax. The Headlee Amendment requires a local vote for any new tax. We would expect local officials would have to make the case to taxpayers, and residents weigh in with a public vote, before levying a new tax. It is our hope that any new tax for highways would be in lieu of local officials pursuing a property tax for roads. Thus, easing some of the pressure placed on taxpayers from an already-high property tax burden."

In some other states, cities already have other ways to levy taxes for roads. For example, Oregon cities are allowed to impose their own fuel taxes. A town can levy a business license tax on fuel dealers, with the amount based on the number of gallons they sell.

Michigan Gov. Gretchen Whitmer’s proposal to increase the state gas tax by 45 cents per gallon has been widely reported. When fully phased-in, the increase would collect $2.5 billion more from motorists each year.

What has been repeatedly misreported by the media, however, is that Whitmer’s plans do not intend on using all of that additional $2.5 billion to “fix the damn roads.”

The executive budget Whitmer recommended in March only dedicates $1.9 billion of that money to the state transportation budget. The extra $600 million would pay for other state spending.

Yet media outlets have repeatedly reported that Whitmer’s tax hike would “raise $2.5 billion to fix the roads.” The misrepresentation matters because Whitmer ran for governor on the slogan “fix the damn roads,” and she called the state’s roadways “dangerous.” Yet, nearly a quarter of the tax increase she has urged will not go to transportation.

In the past week, Democratic legislative leaders have acknowledged that even on their own side of the aisle, the votes aren’t there for the big tax hike. This will all but take the proposal off the table, yet the media is still giving the same inaccurate reports. Here’s a recent sample:

WWMT reported on Aug. 29: “One day after Whitmer told the Republican-led Legislature to ‘stop screwing around’ and present budget proposals to her that create the $2.5 billion she said is necessary to patch potholes and prevent further crumbling, House Democratic Leader Christine Greig, D-Farmington Hills, said the gas tax hike is likely dead.”

Gongwer News Service reported on Aug. 28: “Governor Gretchen Whitmer said today the Republican majorities in the Legislature need to ‘stop screwing around’ on the 2019-20 fiscal year budget and a plan to increase funding for roads and appeared to walk back comments she made Tuesday that signaled she was no longer committed to increasing road funding by $2.5 billion per year.”

WSJM reported on Aug. 28: “Whitmer this morning said if Republicans have another idea instead of her 45¢ per gallon gas tax hike to come up with enough revenue to spend $2.5 billion on roads without taking money away from education, pensions, and other places, she remains open.”

The Escanaba Daily Press reported on Aug. 28: “The state Senate and House have both passed budget proposals, however, the proposed budgets did not include Gov. Gretchen Whitmer’s additional $2.5 billion in funding for roads.”

The Detroit Free Press reported on Aug. 22: “Whitmer’s proposal to increase the gas tax would raise up to $2.5 billion a year to fix Michigan roads.”