Yes, Virginia (or in this case, Michigan), we really CAN increase the gas tax to pay for transportation improvements.
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.
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.