- Associated Press - Wednesday, November 4, 2015

LANSING, Mich. (AP) - Republicans call it a monumental plan that will finally patch deteriorating roads and make transportation funding a long-term budget priority after years of neglect.

Democrats say the legislation Gov. Rick Snyder is eager to sign is a sham that puts at risk other government services and, despite raising taxes and fees, does not pump enough money into infrastructure for five years.

What does it mean for you and your pocketbook? The GOP governor estimates the proposal will cost $60 a year on average per driver or vehicle, $5 a month, to start.

Here’s a look at the $1.2 billion road-funding plan narrowly approved by the GOP-led Legislature late Tuesday, six months after voters defeated a sales tax increase linked to more spending on roads, education and municipalities:



How much you drive will determine how much more you pay at the pump when 7.3-cent state gasoline tax and 11.3-cent diesel tax hikes take effect in January 2017. If you use 60 gallons of regular gas per month, that’s about $4.38 more in taxes, or $52 a year. But in 2022 and every year after, the 26.3-cents-a-gallon fuel taxes will rise by the rate of inflation or 5 percent, whichever is less. That addresses a complaint that the flat gas tax, last raised by 4 cents in 1997, has contributed to stagnant or declining transportation revenue because of no automatic adjustments to account for higher construction costs - a problem exacerbated by people driving less and with more efficient vehicles.



You will pay 20 percent more in annual license plate registrations beginning in 2017. It is an across-the-board increase for passenger cars, vans, light trucks and large commercial trucks. Drivers currently pay $100 a year on average. So you will owe an extra $20 before your birthday, when tabs are renewed. Fees are based on your vehicle’s price; the newer and nicer it is, the more you pay and vice versa.



If you own a gas-electric hybrid car, be prepared to pay extra registration fees - at least $30 for a car or SUV, $100 for a truck. Fees for a fully electric car or SUV will be $100, or $200 for a truck. The registration fees also will go up as fuel taxes rise.



You will qualify for an expanded and more generous property tax credit for homeowners and renters if your household income is below $60,000. Treasury Department spokesman Jeremy Sampson said Wednesday that when the changes go into effect for the 2018 tax year, more than 1.1 million, or 23 percent of filers, could qualify for an average $180 increase in the yearly homestead property tax credit. Somewhere between 80,000 and 100,000 new claimants are expected to become eligible, Sampson said. A family of four with $48,000 in income could get a $229 break, according to Treasury estimates.



Starting in 2023, you might see yearly reductions in the 4.25 percent personal income tax rate under certain conditions. A cut will be triggered if general fund revenue outpaces inflation times 1.425. If inflation rate were 2 percent, for example, the tax cut would only take effect if revenue grows by more than 2.85 percent. If revenue exceeded the trigger threshold, the rate would drop to 4.21 percent initially. Treasury said if the income tax is 4 percent by 2028, a household making $27,000 would save $48, one earning $48,000 would save $80, a family with $100,000 would save $210 and one with $250,000 would save $585 per year.



The Treasury Department analyzed the impact on “typical” households. Assuming a family of four making $48,000 pays $100 more in fuel taxes and license plate fees but receives an additional $229 property tax credit, it would pay $129 less in taxes and fees in 2021. Lower-income households could pay about $50 more in taxes in fees but also get anywhere from a $65 to $206 break - a net savings. Higher earners would pay $117 to $192 more overall but start saving if and when income taxes fall.


Follow David Eggert at https://twitter.com/DavidEggert00

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