Road Fix Defeated at the Polls

Proposal 1 was dealt an overwhelming defeat as 80 percent of voters rejected the sales tax increase and road-funding plan. The proposal, backed by Governor Snyder, would have generated $1.2 billion more for roads as well as new funding for schools and local governments.

When the night was over and ballots were counted, only 19.9 percent voted in favor of the funding plan, which called for an overall tax increase of $1.9 billion. The proposal would have hiked the state sales tax to 7 percent from 6 percent, taken the sales tax off fuel sales, and hiked fuel taxes, raising close to $1.3 billion extra for roads. It would also have generated nearly $200 million a year more for schools, $116 million for transit and rail, sent $111 million more to local governments, and given a $260-million tax break through restoration of the Earned Income Tax Credit.

Now the Legislature and Governor Snyder must come up with a new plan to provide adequate funding for roads and transportation. Late this week, House Speaker Kevin Cotter (R-Mt. Pleasant) unveiled a plan for road funding since the voters rejected the ballot proposal, which includes a re-evaluation of certain tax credits as well as a review of some $20 billion in restricted revenue. The Speaker did not go into detail on the restricted revenue, however, a press statement put out by his office said "the income tax code contains several subjective and arbitrary credits and exemptions," and those "carve-outs" often force the state to cut checks with taxpayer dollars.

With the FY 2015-2016 budget still in play and revenue estimating conferences on the horizon, the Legislature may be able to find some additional monies for roads, but there will need to be a comprehensive plan put together from leadership in both chambers to fully fix Michigan’s deteriorating roads.

In the Senate, no official plan has been introduced but they will be meeting to discuss a strategy on how to move forward with road funding. Leaders in the Senate did agree that Proposal 1 seemed too complex and that voters sent a clear signal that they want a legislative fix instead.

There seems to be a difference between the House and Senate over the approach to road funding. Senate Majority Leader Arlan Meekhof (R-West Olive) indicated this week that he did not think the Senate would put forth a specific plan anytime soon as there needs to be a more deliberative approach to get it right this time.

posted by PAA Online , Friday, May 8, 2015 11:28 AM
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