Michigan House Speaker Matt Hall says he will move a gas tax suspension to Gov. Gretchen Whitmer if the Senate passes it Oct. 1. The plan could cut road revenue by as much as $600 million, and lawmakers have not agreed on a replacement.
Michigan's average gas price reached $4.63 per gallon on Sept. 29. That was about 16 cents above the national average, according to AAA. A House proposal would suspend the state gas tax if prices rise above $5.
The Senate returns Oct. 1. Its decision will determine whether the House takes up the measure this week. House Speaker Matt Hall said Sept. 29 that he would advance the bill to Gov. Gretchen Whitmer if the Senate passes it.
Hall called the effort politically unserious. He also said lawmakers have not agreed on how to replace the lost revenue. The proposal is not law, and Whitmer has not said whether she would sign it.
That is the immediate question.
Senate vote sets the timeline
Senate Majority Leader Winnie Brinks, D-Grand Rapids, said earlier this week that lawmakers could consider a gas tax holiday as drivers deal with higher prices. State Sen. Kevin Hertel, D-St. Clair Shores, introduced a bill last week that could serve as the vehicle for the suspension.
Both chambers would have to approve the same legislation before it could reach Whitmer. If the Senate takes no action, the House measure cannot move through this process.
House Democrats sought a vote last week on a three-month suspension. Their proposal would take effect if gas prices eventually exceeded $5 per gallon. The state's Budget Stabilization Fund would replace the gas tax revenue normally sent to roads.
The fund has an estimated balance of $2.2 billion, according to the State Budget Office. The $5 threshold had not been reached as of Sept. 29.
For people in Farmington, Farmington Hills and nearby Oakland County communities, any change would apply statewide. Cities and school districts do not control the state fuel tax.
Local governments cannot make that call.
Residents checking how the proposal could affect local operations can use the City of Farmington portal for municipal information. The City of Farmington and City of Farmington Hills can manage local streets and services through their own budgets. Neither city can suspend the state levy or replace state transportation revenue on its own.
Road projects face the funding question
Michigan's state gas tax is 52.4 cents per gallon. The federal gas tax is 18 cents per gallon. A three-month suspension of the state levy could reduce state revenue by about $600 million, according to an earlier analysis by the nonpartisan House Fiscal Agency.
Lance Binoniemi, vice president of government affairs for the Michigan Infrastructure & Transportation Association, said the organization opposes the suspension. The state gas tax supplies about one-third of the money dedicated to roads, he said.
Binoniemi said a suspension could delay projects planned for 2027. He also said it could create a precedent for handling future swings in fuel prices.
Road funding comes from other sources as well. They include the state's general fund, a wholesale marijuana tax and vehicle registration fees. Binoniemi said the group is open to discussing replacement revenue.
He said the Michigan gas tax is not responsible for volatile pump prices. The dispute therefore has a direct budget effect. Drivers could receive a temporary break while planned transportation work loses money unless another source fills the gap.
Hall said he has not discussed the suspension with road industry officials. He raised similar concerns about the road funding system approved a year ago. The 24% marijuana wholesale tax in that package is already producing less revenue than projected.
The issue reaches local travel, too. Families moving between homes, workplaces and Farmington Public Schools facilities would see any savings at the pump. Road agencies would have to manage any reduction in state support through the transportation funding system.
The Farmington Public Schools board, the City of Farmington, the City of Farmington Hills and Oakland County administration do not set the state gas-tax rate. Their public meeting agendas cannot settle the statewide replacement-revenue question.
The gap remains.
Political pressure builds
Republican gubernatorial hopeful John James called Sept. 28 for Michigan Democrats to support a state of emergency and suspend the state tax. He said Democrats could act immediately but were choosing not to. He also accused them of wanting the issue for the campaign.
James' position gives another Republican voice to a policy Hall previously criticized as fiscally unrealistic.
Democratic gubernatorial candidate Jocelyn Benson has taken a different position. She supports temporarily suspending the 18-cent federal gas tax. She opposes suspending Michigan's 52.4-cent state tax because she says it would create a large hole in the state budget.
Brinks is Benson's running mate.
Gas prices have stayed elevated for much of the year after the Trump administration and Israel launched military attacks on Iran in late February. Michigan drivers are paying more than the national average. Lawmakers must decide whether immediate relief should come before protecting road revenue.
Michigan lawmakers have faced a similar choice before. Whitmer vetoed Republican-led legislation in 2022 that would have suspended the then 27-cent-per-gallon state tax after Russia's invasion of Ukraine.
The state has also been the subject of earlier coverage involving claims against major oil companies and alleged effects on energy prices.
Residents seeking official information about state fuel-tax administration would need to consult the relevant State of Michigan departmental registries and budget documents. Municipal records do not control the state levy.
Oakland County administration and local city governments may discuss transportation needs. The Legislature would enact the proposed suspension, and the governor would sign or veto it.
What happens next
If the Senate passes a bill on Oct. 1, Hall says the House will vote and send it to Whitmer. He doubts she would sign it. Whitmer's office has not responded to questions about her position.
Hall has urged Brinks and Whitmer to pursue Republican proposals on health care costs, energy bills and property taxes.
The legislative route is clear. The policy is not.
A House vote could put the governor on the spot, but it would not answer the central funding question. Without replacement money, the proposed tax holiday would reduce prices at the pump for a time and cut road-program revenue by a measurable amount.
The Senate bill therefore carries a budget test as well as a price-relief proposal. Lawmakers would have to pair the consumer break with a credible plan to keep Michigan's roads funded.
