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ALPENA – Prior to Jan. 1, Michigan drivers paid a 6 cent sales tax, on top of a 31-cent gas flat tax, per gallon of gasoline.

As of Thursday, that flat tax increased to more than 52 cents 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% of the revenue gained goes to the Michigan Transportation Fund.

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

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

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

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

State Rep. Cam Cavitt of Michigan’s 106th District believes 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, but to schools.

“The funds were earmarked for education. We wanted to fix that,” Cavitt explained.

Heidi Begen, Shell gas station manager for Alpena’s Chisholm Street location, 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, The Alpena News checked the gas prices locally at numerous locations. On average, as of Friday, gas prices in Alpena are $2.51 per gallon.

In the Iron Mountain area Sunday, the average gas price was $2.53 per gallon; in Escanaba, it was $2.29.

According to the 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.