Oi, just when you thought everything was so simply dissected, you find out it's not. It turns out that Michigan's sales tax on gasoline, distinct from its excise tax on gasoline, is by law earmarked for something other than roads, according to this story for mlive.com by Jonathan Oosting:
[A]ccording to Lance T. Binoniemi of the Michigan Infrastructure and Transportation Association, ... the state collects sales tax on fuel but does not earmark any of that revenue for roads.
"It's the biggest public policy problem we have," Binoniemi said today during a joint session of the Senate and House transportation committees. "The general public does not understand that the 6 percent tax does not go to funding roads and bridges. When you include that sales tax, we probably do have one of the highest (gas tax rates) in the nation." ...
Michigan is amongst a handful of states that levies a sales tax on motor fuel sales, but it does not dedicate any of that revenue to road funding. Most Michigan sales tax is constitutionally earmarked for schools and revenue sharing, while a small amount collected from fuel and automotive products is statutorily earmarked for public transportation. State law currently requires retailers to pre-pay sales tax on gasoline based on a projected per-gallon cost set quarterly (and soon, monthly) by the state Treasury. Those rates are based on the price after the federal excise tax but before the state excise tax.
Obviously one cannot simply substitute a general sales tax increase for a fuel tax increase and spend it all on roads when that increase as applied to fuel sales would sequester it and spend it on something else because the Michigan constitution requires it. Gov. Snyder doesn't really have much of a near term choice for increased road funding but to resort to an increase in the excise portion of the tax on fuel. Longer term the constitution would have to be amended, alas.
This is why one should not be amending the constitution for legislative purposes in the first place, an especially bad habit in Michigan where everyone wants to resort to that nuclear option for every pet project and crackpot idea. The result is chaos, confusion, unreason, inflexibility and disorder.
What's a legislature for if not to raise or reduce taxes and defend that at reelection time? Enshrining minutiae like what the 6% sales tax on fuel must be spent on in the constitution simply allows legislators to escape the political consequences of that allocation, which I'm guessing is why so much of Michigan politics seems to get shuffled off to the referendum process, otherwise known, at best, as direct democracy, at worst, as mob rule.
Pretty cowardly when you get down to it.
