By Paul Egan and Kathleen Gray, Detroit Free Press

LANSING – The Michigan Senate voted Thursday to sharply increase gas taxes over the next four years to potentially raise more than $1 billion annually to fix the state's crumbling roads and bridges.

It's a huge breakthrough for Gov. Rick Snyder, who has been pushing for increased road revenues for three years, and for business and labor groups that say Michigan's crumbling infrastructure is holding back the state's economic development.

"These steps are to make Michigan better and stronger," Snyder said in a news release.

But the Senate's action is only one step in a series of moves that could play out in the Legislature's lame duck session well into December. The House still needs to vote on the measure and it's possible the Senate could still tinker with what it passed today.

Based on a wholesale gas price of $2.50 a gallon, the bill the Senate passed Thursday would result in a gas tax hike of 20 cents a gallon when fully implemented on Jan. 1, 2018. Gas prices are unusually low right now and the increase would be greater if prices rise. There are measures in the bill to limit further price increases if the wholesale price of gas spikes.



The wholesale tax would begin at 9.5% on April 1, 2015, and gradually increase to 15.5% on Jan. 1, 2018.



According to a Senate Fiscal Agency analysis, the bill could raise between $781 million and $1.5 billion extra per year for roads when fully implemented, depending on the wholesale price of gas.

The measure also creates fuel tax parity between regular and diesel fuel and was combined with a separate measure that will increase fines for overweight trucks. Currently, motorists pay a 19-cent-per-gallon tax on regular fuel while truckers pay 15 cents per gallon on diesel fuel.

The bill from Senate Majority Leader Randy Richardville, R-Monroe, was passed quickly and without debate, by a 23-14 vote, after a number of false starts earlier in the day.

The Senate took "a big step to show people we're serious," Richardville said. "If you've got an alternative, we're going to take a look at it."

Richardville, who won't be back in the Legislature next year because of term limits, told reporters the measure passed Thursday could still change during the remainder of the lame-duck session. It's still possible voters could be asked to approve a 1 percentage point hike in the state's 6% sales tax as an alternative, he said.

A key change from summer was that lawmakers weren't facing an imminent election, Richardville said. He said a change that increased Democratic support built in flexibility to allow the City of Detroit to use some of the extra revenue to support transit.

In June, when gas prices were higher, Richardville was proposing a similar bill that was estimated to result in a gas tax increase of about 25 cents per gallon over several years.

The measure passed as majority Republicans and minority Democrats in the Legislature engaged in a chess match of sorts. The GOP, despite its large majorities, needs Democratic votes for revenue measures because some of its members will not vote for tax increases.

Democrats don't want measures to pass during lame duck that would repeal the state's union-friendly prevailing wage law or change the way the state's electoral college votes are awarded in presidential elections. They tried to leverage their support to rein in the Republicans on those issues.

"Anything that could be too overtly partisan could destroy any common ground on this issue or any other issue," Senate Minority Leader Gretchen Whitmer, D-East Lansng, said after the vote. "We're satisfied that will not happen."

Whitmer noted a measure to restore cuts to Michigan's Homestead Property Tax, which Democrats negotiated as part of gas tax talks last spring, has also passed the Senate and moved to the House.

Ten of her 12 members supported the gas tax hike.

Thursday's session is expected to be the Senate's last meeting date until Dec. 2. Up to nine session days are scheduled in December.

Snyder has repeatedly called for an extra $1.2 billion to $1.4 billion a year in revenues, and some experts say Michigan now needs even more than that because the passage of time has damaged roads and bridges further.

Detroit Mayor Mike Duggan praised the Senate's action, saying "this bill will allow us to speed up repair of Detroit's roads and make major improvements to the bus service for our 100,000 passengers daily."

Business groups such as the Michigan Chamber of Commerce and labor groups such as the Michigan Laborers District Council also voiced support.

But Scott Hagerstrom, state director of the tea party group Americans for Prosperity, condemned the tax hike.

"Under this proposal, Michigan drivers will pay the highest gas tax in the country," he said. "And future tax hikes will happen automatically without so much as a debate or vote.

"Rather than prioritize state spending, Senate leaders chose to break the family budget."

Earlier, a resolution to ask voters for a 1 percentage point hike in the state's 6% sales tax was soundly defeated.

The proposed constitutional amendment -- which would raise an estimated $1.2 billion to $1.3 billion a year for road repairs --needed a two-thirds majority to go to the ballot but was defeated 18-19.

Snyder told reporters today he would prefer the Legislature pass a revenue measure such as a gas tax hike, then offer voters an option such as a sales tax hike as an alternative, if members want to consider going that route. That way, some measure gets approved either way, he said.

The Senate last considered road funding proposals in June, but the Legislature broke for the summer without reaching an agreement to raise significant new revenues to pay for infrastructure fixes.

The Michigan House earlier passed a package of bills that were expected to raise about an extra $500 million a year, but most of those bills were never taken up by the Senate in June.

It wasn't clear Thursday whether the House would pass the bill the Senate passed Thursday or when in December the House will take it up.

"We don't know until we can get a closer look at it," said Ari Adler, a spokesman for House Speaker Jase Bolger, R-Marshall. "We're pleased we got something back from the Senate," but "any time you're looking at raising taxes , that's something our caucus is going to be concerned about."

State Sen. Coleman Young Jr, D-Detroit, said the action taken on increasing fines on overweight trucks was enough to change his mind from not voting on the gas tax bill the first time it was taken up to supporting it the second time around.

"You can't have your roads look like something out of Book of Eli or Mad Max and say you're a 21st Century state. That's really ridiculous," he said. "So that's something we had to do."

He also appreciated the flexibility included in the bills for the city of Detroit to devote 20% of the road funding coming to them toward buses.

"My district is along the Woodward corridor, so that's a good thing too," Young said. "but that's not the thing that really moved me. We had to go after the truckers."

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4.

How they voted on the gas tax hike

Yes

Jim Ananich, D-Flint; Steve Bieda, D-Warren, Darwin Booher, R-Evart; Tom Casperson, R-Escanaba, Judy Emmons, R-Sheridan; Vince Gregory, D-Southfield; Goeff Hansen, R-Hart; Morris Hood, D-Detroit; Tupac Hunter, D-Detroit; Bert Johnson, D-Highland Park; Roger Kahn, R-Saginaw; Mike Kowall, R-White Lake; Jim Marleau, R-Lake Orion; Arlan Meekhof, R-West Olive; Mike Nofs, R-Battle Creek; John Pappageorge, R-Troy; Randy Richardville, R-Monroe; Tonya Schuitmaker, R-Lawton; Virgil Smith, D-Detroit; Howard Walker, R-Traverse City; Rebekah Warrren, D-Ann Arbor; Gretchen Whitmer, D-East Lansing; and Coleman Young, D-Detroit.

No

Glenn Anderson, D-Westland; Jack Brandenburg, R-Harrison Township; Bruce Caswell, R-Hillsdale; Pat Colbeck, R-Canton; Mike Green, R-Mayville; Dave Hildenbrand, R-Lowell; Hoon-Yung Hopgood, D-Taylor; Joe Hune, R-Hamburg; Mark Jansen, R-Grand Rapids; Rick Jones, R-Grand Ledge; Phil Pavlov, R-St. Clair; John Proos, R-St. Joseph; Dave Robertson, R-Grand Blanc; and Tory Rocca, R-Sterling Heights.

Absent

John Moolenaar, R-Midland