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State fuel tax and vehicle registration fee revenues are collected in a single "pot" known as the Michigan Transportation Fund. After money is taken off the top for a number of items including the Bridge Fund and Mass Transit, the remaining money is divided between the Michigan Department of Transportation, county road commissions and cities and villages according to a formula established by the state Legislature.
The formula calls for 39.1% of the money to go to MDOT (which has jurisdiction over 8% of Michigan's roads), 39.1% to go to county road commissions (which have jurisdiction over 75% of Michigan's roads) and 21.8% to go to cities and villages (which have jurisdiction over 17% of Michigan's roads).
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Roads in Oakland County brochure.
No. New development generates new tax revenue in three ways: New property taxes from the increased property value; new sales tax from increased commerce; and new income tax from new jobs. None of those taxes are used to fund roads in Michigan. The primary sources of road funds in Michigan are the gas tax and vehicle registration fees.