Fuel taxes, higher registration fees roll into the new year

By: Eric Czarnik | Sterling Heights Sentry | Published January 11, 2017

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METRO DETROIT — Some of the basic requirements to drive could become more expensive for Michiganders this year due to the implementation of the state’s road repair funding plan.

In 2015, state legislators passed a plan that increases fuel taxes and vehicle registration fees, expecting to raise hundreds of millions of dollars annually toward road repairs. Those new increases went into effect Jan. 1, 2017. 

As a result, drivers at the pump can expect to see an increase of 7.3 cents per gallon in the state gas tax and a corresponding 11.3 cents per gallon tax increase for diesel. Fuel taxes will be annually adjusted in 2022, adjusting fuel taxes from then on by the inflation rate.

In addition, starting this year, the cost of registering a vehicle with the state is also facing an estimated 20 percent increase, and hybrid or electric vehicles will face additional fees.

On Jan. 2, AAA Michigan reported that gas prices in metro Detroit were about 52 cents higher than at that same time the previous year. AAA said it expects gas prices to keep climbing if OPEC nations succeed in uniting to cut oil production. Additional spikes could occur this spring when refineries undergo maintenance and when summer travel picks up. 

AAA Michigan Public Affairs Specialist Gary Bubar said current gas prices still pale in comparison to prices several years ago when a gallon cost $4 or more, which did have an impact on driver behavior. He said “it’s still a little early to tell” whether increased gas taxes will affect driving decisions. 

 “We really did need to do something in order to enhance our ability to repair and replace our roads, and this is an alternative way to do it,” he said. 

“We’re not looking at major (driving) changes. People will continue to drive for both work and play, and we’ll know better once the summer season gets here. … But we’re still not in the top 10 in terms of gas prices nationwide.”

Michigan secretary of state spokeswoman Gisgie Dávila Gendreau said that, anecdotally, customers have asked about the increased vehicle registration fees. The overall dollar impact of the hike will vary depending on vehicle attributes, she explained.

“Fees are based on the value of the vehicle and the year,” she said. 

Find out more about AAA Michigan by visiting www.michigan.aaa.com. Reach the Michigan secretary of state’s website by visiting www.michigan.gov/sos.

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