Advocacy News – March 13. 2025
What’s new: On March 11, 2025, the Michigan House of Representatives started hearings on 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 appears to be revenue neutral, generating roughly $3B for roads. The package contains a series of bills that reallocates current funding, along with ensuring all fuel taxes collected are used for Michigan’s roads. Some of the significant pieces of the package are:
- Exempting fuel from the sales tax and raises the state fuel tax by 14 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 45 cents per gallon and would be adjusted each year based on inflation.
- Increasing the Michigan Business Tax (MBT) tax rate to disincentivize the participation in Michigan Economic Growth Authority (MEGA) credits.
- Reallocation of revenue to hold the school aid fund harmless.
- Elimination of incentive programs related to economic development.
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. However, placing the burden of funding the roads solely on the backs of Michigan businesses would have a chilling effect, putting jobs and the economy at severe risk.
What’s next: Hearings will continue next week to discuss and flush out the details of the proposed plan.
What we’re doing: The MI Chamber’s 2025-26 Legislative Priorities call for supporting an impactful, long-term, 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.
- We will continue to strongly oppose any increased or new tax on businesses for this purpose.