As previously discussed, the original premise of state fuel taxes was that payment of them would be made in proportion to the benefits received from the roads. This assumes that fuel tax revenues would be used solely to build, maintain, expand and repair public roads. This principle has eroded over the last 40 years, at both the state and federal level.
About 23% of the federal Highway Trust Fund is used for purposes other than the roads. In Michigan, fuel tax revenue is siphoned off for a variety of purposes, such as the Comprehensive Transportation Fund. It funds local public transit, functions of the Secretary of State and the Economic Development Fund, which in turn sponsors narrow transportation improvements for various special interests. Michigan collected a total of $3.17 billion in fuel taxes and vehicle registration fees in 2020, yet only $2.92 billion was distributed to fund state, county, city or village roads. Thus, Michigan diverts 8% of its gas tax and vehicle registration revenue for purposes other than publicly accessible roads, leading Michiganders to think of the gas tax as “just another tax” they pay. A revenue source such as this meets the legal definition of a tax, not a user fee, and this is one of the fuel tax’s biggest faults.
Michigan also collects a sales tax on gasoline purchases, which is not a user tax. A large fraction of that revenue is spent on public schools. Making motorists pay a portion of their taxes to public schools is far removed from an efficient, user-based tax system, and policymakers should consider eliminating it. Further, when gasoline consumption declines, so will the sales tax revenue from those sales, so legislators may want to come up with a replacement. Since public schools exist throughout the state, it would be more appropriate to use revenue from a broader based tax for this purpose, rather than continuing to single out motorists to financially support public education.
 Robert Poole and Adrian T. Moore, “Restoring Trust in the Highway Trust Fund” (Reason Foundation, Aug. 3, 2010), https://perma.cc/9WLB-LX2L.
 Chris Douglas, “Roads in Michigan: Quality, Funding and Recommendations” (Mackinac Center for Public Policy, 2018), 11-12, https://perma.cc/EX7R-P8LU.
 “Schedule A of the Act 51 Annual Report for 2020” (Michigan Department of Transportation), https://perma.cc/Q42J-3CZB.