The state system's needs after cost reductions and elimination of non-highway projects total $293.2 million per year. This need could be funded through a combination of bonding, truck, and automobile user taxes as outlined in Table 7. As proposed by MDOT, $60 million per year of the need should be funded through public bonding. This spreads the funding costs out over the useful life of the projects and charges future users for a portion of the costs. After bonding, this leaves $233.2 million per year of funding needs.
An increase in truck taxes through elimination of the 6 cents per gallon commercial discount could raise an additional $33.6 million per year at the $5.6 million per penny rate related to commercial diesel volumes. Revenues from the truck commercial discount sticker should be retained, but in the form of an equivalent increase in the diesel tax of approximately 2.9 cents per gallon at the $6.9 million rate applicable to all diesel fuel consumption. The diesel discount sticker fee of $92 for in-state trucks and $25 for out-of-state trucks raises some $20 million per year in revenue, with about three fourths of the total coming from out of state registered trucks. However, when Michigan joins the International Fuel Tax Agreement (IFTA) in 1996 as mandated by ISTEA, the state may be limited to charging $10 per out-of-state truck. These fees were initially imposed in part to offset the diesel discount, but the state should consider continuing them as part of the effort to increase the trucking industry's contribution to the costs they impose on the system. These changes would allow the existing $20 million in revenue to continue to be collected after 1996, would reduce administration costs for industry and state government, and would facilitate implementation of a "one-stop" shopping program for the trucking industry.
The fees collected from the $100 per truck motor carrier authority sticker, interstate registration fees and related items should also be eliminated along with passage of complete economic deregulation of the for-hire intrastate trucking and moving industries. These changes would eliminate $6.25 million per year in revenue; however, the approximate $3.5 million per year of this revenue being spent on safety related payments to the Michigan State Police and Truck Safety Commission would have to be made up for in some manner. The necessary revenue could be raised by increasing the diesel tax approximately 0.5 cents per gallon and including an authorization in Act 51 for this money to go to the safety related programs currently being funded by the fees. The elimination of remaining economic regulation and accompanying fees would result in lower trucking prices for office and household moves, would eliminate some $2.75 million in state charges to the trucking industry, would reduce administrative costs related to these fees for both the trucking industry and state government, would facilitate and simplify "one-stop" shopping for all trucking permits, and would spread the costs of truck safety programs more equitably over both private and for-hire trucking companies.
The result would be a 9.4 cents per gallon increase in taxes for diesel users. However, for the trucking industry, 3.4 cents per gallon represents a replacement of other fees, leaving a net increase of 6 cents per gallon. The net revenue increase would be $33.6 million per year, an approximate 15% increase in total trucking industry registration, fuel tax and fee payments.
Those in favor of new revenues could raise the remaining $199.6 million through a gas tax increase. At the $45.7 million per penny rate, an increase of 4.4 cents per gallon would be required. Table 7 summarizes the impact of these tax increases. The additional revenue raised from both the diesel and gas taxes should be dedicated to the State Trunkline System, and would not be split with local governments under the existing formulas in Act 51.