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Michigan senators seek summer pause on gas taxes. Whitmer ‘encouraged’

gas pump
Michigan gas taxes averaged $4.56 a gallon on Thursday, according to AAA, and state senators say a tax savings plan would save about 50 cents a gallon. (Shutterstock)

LANSING — Michigan senators reached a bipartisan agreement to press pause on gas taxes Thursday, citing sky-high prices at the pump in recent weeks.

A set of bills that collectively would temporarily suspend both the 27-cents-per-gallon gas tax and the 6 percent sales and use taxes on gas purchase for the summer were overwhelmingly approved in the state Senate Thursday ahead of Memorial Day weekend.

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Under the legislation — Senate Bills 972, 973, 974 and 1029 — the taxes would not be collected from June 15 through Sept. 15.

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Senate Republicans estimated the effort would save drivers roughly 50 cents per gallon. According to AAA, Michigan’s average gas tax price was $4.56 on Thursday. 

“We are fighting to lower taxes so residents can better afford record-high inflation and gas prices,” said Sen. Aric Nesbitt, R-Lawton.

In all, the nonpartisan Senate Fiscal Agency estimates the plan could cost the state up to $800 million in lost tax revenue in the current fiscal year — although updated revenue projections show the state continues to benefit from a large budget surplus. 

The bills as written stipulate $300 million would go to local governments and road commissions to offset lost revenue. 

Although a handful of Democrats didn’t support the plan, Senate Minority Leader Jim Ananich, D-Flint, advocated on its behalf.

“Inflation is high, budgets are tight, and the state has a responsibility to step in and help,” Ananich said. 

Education groups blasted the bill due to concerns the legislation would cut into available funding for Michigan schools. 

Trina Tocco, a member of the Michigan Education Justice Coalition and Fund MI Future, said in a statement the plan would be “more likely to benefit profitable oil companies with no guarantee of help for struggling consumers” at the expense of students. 

The bills now head to the Michigan House. 

Thursday’s vote comes two months after Gov. Gretchen Whitmer vetoed Republican legislation to suspend the gas tax and cut the personal income tax rate to 3.9 percent from 4.25 percent, as well as increasing the amount of retirement income that’s tax free to $80,000 for couples.

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Whitmer said at the time she supported pausing the 6 percent sales tax on motor fuels and encouraged the Legislature to support her plans to expand income tax relief for seniors and the Earned Income Tax Credit. 

In a statement, a Whitmer spokesperson said she is “encouraged” by the Senate’s action and will monitor the legislation as it advances.

“She has called for relief at the pump for Michigan drivers,” spokesperson Bobby Leddy said. “The governor looks forward to working with the Legislature on a broader bipartisan agreement that puts Michigan first by cutting taxes and providing real relief right now for our seniors and working families.”

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