Governor's Road Funding Plan Hits First Hurdles

Senate Majority Leader Randy Richardville (R-Monroe) stated this week that he is not currently supportive of Governor Rick Snyder’s proposal to raise $1.2 billion in additional revenue for transportation and infrastructure.

The Governor has proposed an effective 14 cent increase in the gas tax (from 19 cents to 33 cents, but on a wholesale level formula) and a sharp increase in vehicle registration fees of 60 percent for automobiles and light trucks and 25 percent for heavy trucks.

It is the latter portion of the Governor’s proposal, the registration fee increases, that also has received opposition from Secretary of State Ruth Johnson.

The legislative committee leaders both appear a bit more apprehensive in removing anything from the table as discussions have really just begun formally with this week’s first joint hearing. The House Transportation and Infrastructure Committee is chaired by Representative Wayne Schmidt (R-Traverse City) and the Senate Infrastructure Modernization Committee is chaired by Senator Roger Kahn (R-Saginaw).

Secretary of State Johnson indicated that the registration fees are already in the upper half of those from other states; however, the transportation taxes have not been increased since 1997.

posted by PAA Online , Friday, February 15, 2013 10:12 AM
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Rainy Day Fund Proposed to Carryout Dredging Activity

Multiple Senate Republicans showed support on Tuesday for legislation that would look to the state’s Budget Stabilization Fund (“rainy day fund”) for $30 million to fund dredging of Michigan ports now and in the future. Governor Rick Snyder called for the allocation of $22 million from the state’s budget to be used for dredging projects. However, Senate Republicans believe that dredging now is an emergency situation and the rainy day fund was put into place to address this type of need. Senator Howard Walker (R-Traverse City) acknowledges the importance of contributing to the rainy day fund, to keep Michigan’s bond rating low, however he does not believe that the fund was created for just that reason alone.

Senator Goeff Hansen (R-Hart) and his colleagues developed a five-point plan, which goes along with the Governor’s proposal, with both long and short term dedicated funds to solve the annual struggles with dredging needs. His specific proposal would earmark an important part of local funds in order to set up long-term funding plans for statewide dredging and guarantee a committed funding stream well into the future.

Senator John Pappageorge (R-Troy), Senator John Proos (R-St. Joseph), Senator Tonya Schuitmaker (R-Lawton) and Senator Tom Casperson (R-Escanaba) are equally concerned with the factors which would arise without emergency dredging and how these factors would affect their respective district. Mr. Pappageorge is concerned with declining lake levels because it forces barges to reduce the amount of gas they can carry, which means more trips and higher gas prices. A port in Mr. Proos’ district has a $20 million annual impact on Michigan’s economy and that would be in danger. Sen. Tonya Schuitmaker’s concern mirrors Sen. John Proos; however, she also sees the importance of dredging to further the success of the state’s tourism industry. Sen. Tom Casperson’s district in the Upper Peninsula is responsible for transporting iron ore from its pits to a steel company that helps produce Ford F-150 trucks. The iron ore freighters are facing problems that could be solved by dredging.

posted by PAA Online , 10:11 AM
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January, Year-To-Date Revenue Numbers Mixed Bag

Year-to-date for the fiscal year, General Fund revenues are $37.6 million higher than expected and School Aid Fund revenue is $1.7 million lower than expected, according to the Senate Fiscal Agency.

Net income tax revenue for January 2013 was just over $1 billion, an almost 17 percent increase from January 2012. Withholding payments, representing a majority of income tax revenue, were $23.4 million above numbers from the last revenue estimating conference – just last month.

Also positive were the numbers reported on the real estate transfer tax. January numbers were 82.7 percent higher than a year ago and year-to-date numbers are also running 80-percent above last year’s totals – further indicating improvements in the housing sector.

posted by PAA Online , 10:10 AM
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Group Seeking Changes to Referendum Rules

The state Constitution bans referendums on appropriations bills and the Supreme Court has said that the ban applies to any legislation containing an appropriation, regardless of size. This has been used multiple times to ensure controversial measures are not subject to referendum – most recently applied to the “right-to-work” legislation late 2012.

If a new group, formed and evidently solely-supported by Ferndale resident Bill Lucas, is successful, that will no longer be the case.

Voters for Fair Use of Ballot Referendum is proposing to change the rules so that the policy portion of the language can be repealed via referendum, without affecting the appropriation. Mr. Lucas is hopeful the language will be approved for the ballot this year.

The language is schedule to be reviewed by the Board of State Canvassers today.

posted by PAA Online , 10:09 AM
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Last Week's Survey Results

In the February 8^th edition of PAAdvisory, readers were asked if, with a balance of $500 million, they believe the state should continue to deposit funds into the Budget Stabilization Fund, or “Rainy Day Fund?”

65 percent responded “yes” and 35 percent replied no.

posted by PAA Online , 10:07 AM
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PAAdvisory Briefs

Decision on Detroit EFM Coming Soon

The financial review team’s work in the City of Detroit should be concluded soon, and the Governor will reportedly make his decision regarding the potential appointment of an emergency manager soon thereafter. The Governor and State Treasurer Andy Dillon have spent a large quantity of time dealing with Detroit’s financial situation, including the negotiation of a consent agreement signed nearly a year ago; however, the City’s financial structures and cash flow remains unstable.

Approval Numbers Dive for Snyder

Prior to signing the “right-to-work” legislation late last year, Michigan Governor Rick Snyder’s job approval numbers were hovering at 51 percent according to EPIC/MRA poll data. The Governor is now faced with only 36 percent job approval and a 61 percent disapproval rating. Most surprising was the Governor’s rating among fellow Republicans, a 61 percent approval level. Most incumbent executives enjoy approval ratings from their own party above 80 percent.

Trump to Headline May Event

The Oakland County Republican Party’s May 21^st Lincoln Day dinner in Novi is getting some star power for its keynote speaker – real estate tycoon and reality TV star Donald Trump. Mr. Trump released a statement describing the Oakland GOP’s event as one of the oldest and most influential in the country, stating he could “not have been more pleased to receive this invitation.”

posted by PAA Online , 10:06 AM
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Question of the Week 2-15-13

posted by PAA Online , 9:43 AM
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