Michigan House approves road funding package that redirects fuel sales tax revenue to roads

Lansing — The Michigan House of Representatives on March 18 passed a multi-bill road funding package made up of House Bills 4180–4187 and 4230 that replaces the state’s current general sales tax treatment of motor fuel with a new funding structure intended to send those revenues to road and local road agencies.

Supporters framed the plan as a long-term, revenue-neutral fix that will allow the Michigan Department of Transportation and county road agencies to plan multi-year projects. Opponents said the shift risks large cuts to schools, health care and housing programs and urged more time to assess budget impacts before enacting the changes.

Representative Altman, a sponsor, said the package “directly addresses these challenges, dedicating an additional $3.1 billion annually to fixing our roads with a strong focus on the local roads people rely on every single day.” Representative Coontz said the proposal “fixes the problem without raising taxes” and cited $2,550,000,000 that the plan directs to local roads. Representative Longjohn, who identified himself as the only physician in the House, said he opposed the package and warned that uncertainty in federal funding could leave “2,700,000 Michiganders . . . at risk of losing aspects of their health care.” Representative Rogers and others warned the measures could produce roughly $3 billion in cuts to unspecified state programs.

Floor debate lasted roughly an hour and included a mix of bipartisan praise for the stated goal of fixing roads and persistent concern about trade-offs. Representative Frisbie described the “abysmal state of our roads and bridges” and urged passage; Representative Wooden, whose background she said was in affordable housing development, opposed the package because it “zeros out” the Housing and Community Development Fund, which she said has been funded at about $50 million annually and helped produce or preserve roughly 1,390 affordable housing units under the MI Neighborhood Program.

Legislators on the floor cited specific local impacts built into the plan. Representative Thompson highlighted increases for counties and cities, saying Wayne County would receive about $121 million and the city of Taylor about $20 million; Representative Linteen said her legislation within the package would direct $755 million of sales tax revenue to the School Aid Fund to protect school funding.

Votes at a glance - House Bill 4180 (amend General Sales Tax Act): passed, 65-43. Immediate effect ordered. - House Bill 4181 (amend streamline sales and use tax revenue equalization act): passed, 65-43. Immediate effect ordered. - House Bill 4182 (amend the use tax act): passed, 65-43. Immediate effect ordered. - House Bill 4183 (amend Motor Fuel/Water Fuel Tax Act): passed, 62-46. Immediate effect ordered. - House Bill 4184 (amend aeronautics code): passed, 62-46. Immediate effect ordered. - House Bill 4185 (amend General Sales Tax Act, with adopted amendment): passed, 64-44. Immediate effect ordered. - House Bill 4186 (amend Michigan Business Tax Act): passed, 61-47. Immediate effect ordered. - House Bill 4187 (amend Income Tax Act of 1967, with adopted amendments): passed, 63-45. Immediate effect ordered. - House Bill 4230 (amend public roads, streets and highways act): passed, 63-45. Immediate effect ordered.

What passed: The bills together change how sales tax related to motor fuel is treated and reallocate revenue streams to create a stable, multi-year funding source for state and local roads, fund transit increases and related infrastructure priorities, and include sponsor-directed allocations (for example, set-asides for local roads and, in some sponsors’ amendments, protections or transfers to the School Aid Fund).

What remains unresolved: Multiple members urged greater fiscal clarity. Opponents repeatedly said the plan could produce nearly $3 billion in reductions in other parts of the budget; sponsors countered that the package is revenue neutral and reallocates existing revenue rather than increasing taxes. Several speakers emphasized that final implementation and detailed spending plans will be determined in follow-up budget and implementation work.

Next steps: Each bill was ordered given immediate effect by the House, which sends the measures on to the next step in the legislative process (enrollment and the governor). The package’s provisions will require further administrative and budgetary actions to allocate and distribute funds to MDOT, county road commissions, transit agencies and other recipients.

Speakers quoted and floor context are drawn from the House session transcript for March 18, 2025.