Tags: tax | hike | roads | Michigan

Michigan Voters Defeat Tax Hike in Debate Over Road Funding

Wednesday, 06 May 2015 06:31 AM

Gov. Rick Snyder and lawmakers will be forced to consider yet another alternative to address Michigan's deteriorating roads after voters' resounding rejection of a ballot measure that would have increased taxes to pump $1.2 billion a year more into transportation infrastructure.

The long-running debate will again center on whether to hike taxes or reduce other government spending to boost funding for a network of highways, streets and bridges described as the country's worst and whose major source of revenue, fuel taxes, is not keeping pace with construction and snow-plowing costs.

But given the bipartisan ballot proposal's overwhelming defeat — it lost by a 4-1 ratio Tuesday, according to unofficial returns — higher taxes could be a nonstarter in a more conservative Legislature than the one that in December voted to put the constitutional amendment on Tuesday's ballot.

"The taxpayers sent a very clear message today with their rejection of Proposal 1: No new taxes. Everyone, and I mean everyone, in the administration and the state Legislature should hear this message loud and clear," said Sen. Jack Brandenburg, a Republican from Macomb County's Harrison Township.

Snyder, a potential Republican presidential candidate who conceded that significantly boosting transportation spending this construction season is a lost cause, had failed to persuade lawmakers to approve fuel tax and vehicle registration fee increases through legislation. They also balked at his later push for an either/or option among tax hike proposals that would have let voters pick which way taxes would be increased.

"This was better than doing nothing," he said of the measure. Its centerpiece was a 1-cent sales tax increase that would have eliminated the sales tax on fuel, restructured and doubled fuel taxes, and hiked vehicle registration fees to boost the state's $3.7 billion transportation budget to $5 billion, an increase of a third.

Voters crushed the ballot initiative for a number of reasons — an aversion to higher taxes, its complexity, angst that the Legislature passed the buck, concerns about disproportionately hurting the poor with the sales tax increase and unhappiness that more than $500 million in additional tax revenue would have gone to public transit, schools and law enforcement.

Snyder pledged Tuesday to continue seeking a comprehensive, long-term solution. The Legislature last increased the 19-cents-a-gallon gasoline tax in 1997. Michigan spends less on highways per capita than all but one other state.

How Republican legislative leaders who backed Proposal 1 will respond is uncertain.

House Speaker Kevin Cotter scheduled a Wednesday meeting with reporters to discuss future steps. Voters "want a simple solution, low taxes and a focus on roads instead of other projects," he said.

Senate Majority Leader Arlan Meekhof said his first priority is passing the next state budget but added that he believes the measure's defeat shows voters want the Legislature to solve the problem.

"Road funding issues have plagued Michigan since the current structure was passed in 1997. It took decades to come up with a compromise, and it will take time to come up with an alternative."

Some supporters cautioned that voters want a proposal involving only road and bridge repairs and are not OK with cutting deeply elsewhere in the budget to free up money for transportation.

"Michigan voters want the roads fixed and are willing to support higher taxes to do so, as long as those taxes are guaranteed to go to roads, bridges and transportation only," said Dan Gilmartin, executive director and CEO of the Michigan Municipal League.

Democratic leaders, meanwhile, said business should pay its fair share for roads after benefiting under a GOP tax overhaul four years ago — declining to detail specifics. Democrats worry Republicans will revive a 2014 House plan, opposed by Snyder then, to divert money from schools and local governments for road and bridge repairs without hiking taxes.


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Gov. Rick Snyder and lawmakers will be forced to consider yet another alternative to address Michigan's deteriorating roads after voters' resounding rejection of a ballot measure that would have increased taxes to pump $1.2 billion a year more into transportation...
tax, hike, roads, Michigan
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2015-31-06
Wednesday, 06 May 2015 06:31 AM
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