LANSING, Mich. — Michigan fight over a temporary gas-tax holiday is colliding with warnings that suspending the levy could blow a hole in road budgets already facing a multi-billion-dollar shortfall.
At a Tuesday night gubernatorial forum, Secretary of State Jocelyn Benson said she is open to suspending the state gas tax while tying high pump prices partly to the war in Iran. Congressman John James backed a suspension more directly, saying about 52 cents off a gallon would bring statewide averages down from the mid-fours into the threes.
AAA reports the average price of gas in Michigan is about $4.40 a gallon. Removing the roughly 52-cent state tax would drop that average to about $3.88, according to the same reporting. A Tax Foundation report stated in July that Michigan has the sixth-highest gas tax in the country, ahead of neighboring Ohio.
Separately, Senate Bill 1187 proposed a temporary suspension and was referred to the Senate Committee on Finance, Insurance and Consumer Protection, but it was not brought to a Senate vote on October 2, 2026. House Speaker Matt Hall opposed a suspension, arguing it could weaken Michigan long-term road-funding plan.
The Michigan Infrastructure and Transportation Association estimated a three-month suspension could cut about $600 million in road revenue, and some lawmakers have put the potential loss near $700 million. The group also says the state faces an annual road-funding shortfall of more than $2 billion even after adopting a longer-term transportation plan. As of October 2026 the gas tax stands at 52.4 cents per gallon, with most proceeds supporting state and local roads and public transit.
