Michigan Senate Republicans on Tuesday accelerated a GOP plan to temporarily scrap the state’s 27-cent gas tax, a move Governor Gretchen Whitmer has previously flagged as a prime candidate for the veto.
The legislation passed by a 24-14 margin, with Democratic Senators Dayna Polehanki of Livonia and Sean McCann of Kalamazoo joining their GOP colleagues in supporting the bill. However, proponents failed to clear a procedural hurdle on the measure that could render it meaningless.
Lawmakers have launched political attacks frequently deployed during these debates. But they also suggested supporting a separate tax cut, which would likely attract bipartisan acceptance and potentially force Whitmer to make a difficult political decision.
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The bill approved Tuesday would cancel the state gasoline tax through September, the end of the fiscal year. Earlier in the day, an analyst with the nonpartisan Senate Tax Agency told lawmakers the measure would cost the state about $750 million in tax revenue and save the average driver in the state about $75.
Frequently, after approving a measure, legislators take a second vote to ensure that the bill becomes law immediately after it is signed by the governor. However, the tax cut did not gain enough support to give it immediate effect – this means that even if Whitmer supported and enacted it, the cuts would not take effect until after the proposed tax holiday period. .
Gas prices have skyrocketed in recent weeks for a variety of reasons. Democrats argue it’s largely war in Ukraine, while Republicans point to the steady rise in prices before Russia’s invasion and generally blame the Biden administration.
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Republican leaders in the House and Senate announced last week that they had the votes to send a gas tax reprieve to the governor. Whitmer advocated suspending the federal gas tax, but previously suggested that suspending state fees would not help families in Michigan.
At Lansing last week, Whitmer promoted targeted tax relief that focuses on “the needs of people struggling to keep their heads above water.” She touted her own goals and policy suggestions, including plans to repeal the state pension tax and expand the earned income tax credit for low-wage workers.
The Republican plan to temporarily cut the state’s gas tax “will not have lived up to any of those things I just said, so you can come to your own conclusions,” Whitmer said when asked. on a possible veto.
During Tuesday’s discussion, Republicans accused Democrats of offering fanciful amendments to the bill while ignoring the needs of Michigan drivers. Democrats have attempted to add several potentially massive changes, including sweeping price gouging protections and efforts to tie the fate of this measure to future reforms to the state’s no-fault auto insurance laws — a ban on the Republicans.
Democrats have hit back, saying these are valid ideas that Republicans refuse to bring up in any other forum. They also suggested Republicans are exaggerating any positive impact of the measure approved on Tuesday, suggesting the bill would cripple the state’s ability to repair roads.
At the end of the discussion, Senate Minority Leader Jim Ananich, D-Flint, laid out a plan he shopped around for a week: He wants to create a gas sales tax holiday, arguing that it would offer more relief to consumers and prove less detrimental to the state’s ability to finance highway projects.
“I think working toward sales tax relief and encouraging the federal government to provide federal gas tax relief would put real resources in people’s pockets,” Ananich said.
Several Republicans announced the idea of a sales tax cut before Ananich’s speech. But Senate Majority Leader Mike Shirkey, R-Clarklake, pounced on comments from his counterpart.
“I can’t wait to finally put an issue at the heart of gasoline sales tax, I can’t wait to do it,” he said.
The measure returns to the House for formal approval before being forwarded to Whitmer’s office, a decision that could take place later this week.
Contact Dave Boucher at [email protected] or 313-938-4591. Follow him on Twitter @Dave_Boucher1.