Advocacy News – March 21, 2025
What’s new: This week the Michigan House of Representatives voted out Speaker Hall’s proposed road funding package. The House proposal is an alternative approach to the Governor’s proposal that seeks to increase the Corporate Income Tax (CIT) and create new taxes.
The big picture: The proposal seems to generate roughly $3B for roads, containing a series of bills that reallocate current funding, along with ensuring all fuel taxes collected are used for Michigan’s roads. Some significant pieces of the package are:
- Exempting fuel from the sales tax and raises the state fuel tax by 20 cents per gallon so that the cost of gas doesn’t change compared to the March 2025 average. Combined with the existing state fuel tax, the fixed rate would be 51cents per gallon and would be adjusted each year based on inflation.
- Reworking the aviation fuel formula
- Increasing the Michigan Business Tax (MBT) tax rate to 30% to push the participation in Michigan Economic Growth Authority (MEGA) credits out of the MBT
- Reallocation of revenue to hold the school aid fund harmless.
- Elimination of incentive programs related to economic development.
- Backfills local revenue sharing loss by the removal of sales tax on fuel.
Why it matters: Michigan’s chronic underfunding of road maintenance and rebuilding has led to the Great Lakes State having some of the worst transportation infrastructure in the country. Though the MI Chamber has some concerns with some specifics in the package, this is a significant step forward with key provisions that will prioritize existing revenues to core issues important to the state like infrastructure.
What’s next: The bills are now before the Senate. We anticipate the Senate will begin looking at road funding post spring break and have its own ideas and priorities related to funding and allocation.
What we’re doing: The MI Chamber’s 2025-26 Legislative Priorities call for an impactful, long-term and fiscally sustainable infrastructure investment plan that starts with rethinking how existing tax dollars are allocated and spent.
- The MI Chamber is strongly opposed to increased business taxes jeopardizing our state’s business climate and economic competitiveness to fund road proposals. This includes the MBT tax increase in the package.
- We will continue to strongly oppose any increased or new tax on businesses for this purpose.
- Read our memo to the House Transportation and Infrastructure Committee.
For questions or feedback, contact Mike Alaimo or Randy Gross.