News photo by Josh Jambor. Customers at the Alpena West EZ Mart fuel up on Friday morning. A new gas tax took effect on Jan. 1.

ALPENA – Prior to Jan. 1, Michigan drivers paid a 6 cent sales tax, on top of a thirty-one cent gas flat tax, per gallon of gasoline.

As of Thursday, that flat tax increased to more than $0.52 per gallon and the sales tax was eliminated.

That means there will be an increase of 21 cents for every gallon of fuel purchased.

The state budget that was passed in October calls for $1 billion in future road and infrastructure improvements. The adjusted tax on gas was set to raise those funds.

According to information published on Michigan.gov, 98 percent of the revenue gained goes to the Michigan Transportation Fund (MTF).

The money is slated to be distributed to the state highways fund (STF), 34.4 percent, and county roads are expected to receive about 34.4 percent of the overall revenue the tax rakes in.

Cities and Villages are supposed to receive 19.2 percent and the Comprehensive Transportation Fund for Public Transit 9.8 percent.

The Recreation Improvement Account is slated to receive 2 percent of the tax revenue and local recreation projects only 2 percent.

The old sales tax went up and down with fuel prices, but the new tax will not. It is now a fixed amount.

If fuel prices hit $3.50 a gallon, consumers begin paying approximately a penny less per gallon under the new system.

Another example, here in Alpena, if the average cost of gas is $2.66 per gallon, there is a 10 percent increase at the pump. Additionally, every year it will automatically increase 5 percent without another vote on the legislation.

Local State Representative for Michigan’s 106th district, Cam Cavitt, believes the consumers will not feel an impact immediately.

“Our biggest concern was that the consumer does not feel the impact at the pump,” Cavitt said.

Cavitt also explained that prior to implementing the new budget, the gas tax did not go to roads.

“Previously, the gas tax did not go to roads, that money went to schools,” Cavitt explained. “The funds were earmarked for education. We wanted to fix that.”

Shell gas station manager for the Chisolm Street location, Heidi Begen, said she has not heard any complaints or seen any impacts yet as a result of the new gas tax.

“I have not heard anything yet from customers. We are treating it as a wait-and-see situation. Ultimately, people are going to need gas,” Begen said. “Hopefully, the new tax will not affect prices too much anytime soon.”

With the tax increase now in effect, we checked the gas prices locally at numerous locations. On average, as of Friday, gas prices in Alpena are $2.51 per gallon. According to the AAA (American Automobile Association), the national average is $2.83 per gallon.

A year ago, the national average was $3.06 per gallon for regular fuel.