Emma Ockerman

Detroit Free Press

Shiva Ganganithi got a bit of a shock just ahead of his Jan. 3 birthday when the notice for his annual vehicle registration arrived in the mail recently. He owed $339 in renewal fees, an amount he called "astronomical" compared to the previous rates for his 2011 and 2007 Toyota Priuses.

“I called the (Secretary of State’s Office) and I asked what was going on,” said Ganganithi, a 25-year-old. “They said I was three days over when the new bill kicks in, but if you pay before the end of December, you’d be grandfathered into the current rate.”

The fee hike may be a surprise for some Michigan drivers — Ganganithi found out via a Michigan License Plate Renewal Notice sent to his Sterling Heights home last month — but it’s been in the works since Gov. Rick Snyder signed a series of bills in November 2015 as part of a $1.2-billion road-funding package. Michiganders still have some time left to renew their registration with 2016 prices, if their birthday is within the next six months.

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The plan — which will raise an additional $600 million annually in taxes for transportation purposes — increases annual vehicle registration costs for passenger vehicles and commercial trucks by about 20% and increases the state gas tax by 7.3 cents. Owners of hybrid and all-electric vehicles will pay even more.

The vehicle registration fees alone will account for about $200 million annually in increased revenue. Because the fiscal year started in October, the total plan will only generate an estimated $450 million for fiscal year 2017.

The average cost for registration tabs currently runs at about $120, Michigan Department of State spokeswoman Gisgie Dávila Gendreau said. The fees are based on the value of the vehicle and its year, with additional costs including personalized or fund-raising plates, or whether a driver chooses to pay for a recreation passport, which grants access to Michigan’s state parks.

Additional registration fees will be added for hybrid and electric vehicles, Dávila Gendreau said.

Electric vehicles, or cars that are not capable of using gasoline and other traditional fuels, will be subject to an annual $100 surcharge, in addition to a $35 gasoline tax. Owners of the Chevrolet Spark EV, Bolt or Ford Focus Electric, for example, would experience that estimated $135 registration fee hike on top of their usual registration fee.

Owner of hybrid vehicles will pay a $30 surcharge on top of registration fees, plus a $17 gasoline tax. Hybrids are considered any vehicle “that can be propelled at least in part by electrical energy” while using a battery storage system of “at least four kilowatt-hours,” according to the law’s language.

Ganganithi, with two hybrid vehicles, opted to register before the end of the year, saving him about $130. Next year, he will get socked with the full increase.

Al Fields, 63, of Detroit, renewed his registration on his birthday Friday at the Secretary of State Office on Grand Boulevard. He said he was "glad to have a December birthday" after hearing about the fee hike when the plan passed, as his 2014 Ford Mustang already costs $147, which includes the recreation passport.

"I think the roads need to be fixed, the money just has to be appropriately applied," Fields said.

Michigan drivers can renew their vehicle registrations up to six months in advance and will receive a notice from the state 45 days ahead of their renewal deadline. With that notice, registration renewal can be conducted in person at a Secretary of State Office, online or via mail. Without it, drivers will have to renew their registration in person, according to the Department of State’s website.

Those interested in determining the cost of their vehicle registration fee can visit the Department of State’s website to use its “registration fee lookup” tool.

For reference, Ganganithi’s 2007 Toyota Prius would presently cost $91 in renewal fees, according to the Department of State’s registration fee calculator, while his 2011 Prius would cost $116. The notice sent to his home showed new fees of $154 and $185 for the respective vehicles, not including recreation passports — about a 63% increase in his overall bill.

States with toll roads tend to have smaller registration fees, according to the National Conference of State Legislature’s website . Ohio has an annual fee of $34.50, while Pennsylvania’s fee is $36, for example.

That’s on top of a 7.3-cent-per-gallon increase in Michigan’s fuel tax, which is 19 cents a gallon for gasoline and 15 cents a gallon for diesel fuel. The fuel tax will account for $400 million in additional revenue annually.

Both diesel fuel and gasoline will have an applied 26.3-cent tax starting Jan. 1, 2017, in addition to Michigan’s 6% sales tax. So, if a driver with a 12-gallon tank pays $2.28 in fuel taxes for a fill-up of regular gasoline now, he or she would pay about $3.15 in fuel taxes at the pump next year, in addition to sales tax.

The fuel tax will continue to increase by 5% annually, or by the inflation rate, whichever is less, according to a previous Free Press report.

The plan will not phase in the full $1.2 billion for transportation until fiscal year 2021, after the budget takes effect in October 2020, said Jeff Cranson, spokesman for MDOT, with that full amount dependent on future legislatures committing $600 million from the general fund. There is no binding requirement for the Legislature to commit that future funding. If granted, the full amount would then be split among state roads and county roads, which would each receive 39% of the cut, and city and village roads, which would receive 22%.

MDOT will have about $1.1 billion to spend on state trunk lines in the 2017 fiscal year — $4 million less than it had in 2016 — though the state will devote $804.4 million to state counties, and $459.5 million to cities and villages, according to previous Free Press reports. General fund spending for roads came to a halt in October, Cranson said.

Sabrina Smith, 45, was with her 24-year-old daughter on Thursday at Secretary of State site in Flint on Saginaw Street, waiting for her to renew the registration for her 2006 Pontiac G6. The new tag came to $94, and Smith said she was not aware the 20% hike would be coming in just a few weeks.

“They don’t do anything around here, we still have busted roads and we’re still going to have busted roads,” Smith said. “I don’t think (the state) will do anything with the money.”

In the long run, Ganganithi hopes the registration fee will save him money — he said he has to replace bent tire rims each year after continuing to travel on a pothole-infested invested Mound Road.

"That's an expense I have to earmark every year just by living in Michigan," he said. "I'm hoping that our roads become a lot smoother."