248-409-1900 dburke@mi-worklaw.com

By: Dan Cohen – 5/12/15

I have read quite a few editorials on the historic rejection of Proposal 15-1 by a 4 to 1 margin, but the title I like best is “Voters Crush Proposal 1 in Record Wipeout” by Gongwer News. The Monday-morning quarterbacks all agree on three things: (1) the proposal was doomed from the beginning due to its complexity and its gifts to special interest groups having nothing to do with fixing the roads; (2) citizens want a roads-only plan; and (3) citizens resent putting politicians in office, paying them only to have them punt.

In its press release, the state’s leading small business organization, the National Federation of Independent Business (NFIB), offered the following comments in regard to the failure of Proposal 15-1:

  •  “Voters have made it clear that they want a straight up proposal that addresses road funding and not unrelated issues such as school and local government funding, the earned income tax credit or other issues,” said NFIB State Director, Charlie Owens. “Small business owners understand the importance of roads and are supportive of efforts that build on prioritizing current spending before embarking on an overall tax increase for the entire funding need.”
  • Owens pointed out that back in early 2014 when there was a budget surplus, NFIB members preferred that the money be used for roads rather than an income tax cut. “When you consider that the income tax is the business tax for most small businesses it says a lot that they were willing to forgo a tax cut in favor of road funding,” said Owens. “Our small business members also supported the original House funding plan offered up last year.”
  •  “The outgoing 2014 legislature created an obligation on the new legislature (that took office in 2015) to hold off on any plan until the fate of Proposal 1 was decided,” said Owens. “That obligation is now lifted and lawmakers can start with a clean sheet of paper.”

It doesn’t take rocket scientist to understand that Michigan roads are about the worst in the nation because of neglect and underfunding.  According to former Michigan Treasurer, Robert Klein, “Michigan ranks dead last in spending per capita on roads and bridges.  It is no surprise our roads are in such bad shape.”

Enough said about the past.  I want to know what Lansing intends to do about our roads.  It is a simple question with a $1.2 Billion Dollar answer.  Governor Snyder has previously said he would raise the gas tax and increase vehicle registration fees to raise the money. Former House Speaker, Jase Bolger, would replace the sales tax on gas with a fuel tax.  This actually passed in the House but not in the Senate likely because the removal of the sales tax on gas would take millions from schools and local governments.  The Senate Plan called for a phased in gas tax increase of $.20 a gallon phased in over three years.  Others have suggested: (1) a simple sales tax increase of 1% which all goes toward fixing the roads; (2) using the interest from the $18 Billion Dollar Catastrophic Claims Fund; (3) a 10% across the board budget cut all of which would be earmarked for the roads; (4) toll-roads; (5) vehicle charges based upon weight of the vehicle and miles driven; and (6) reducing Michigan’s highest-in-the-nation gross truck weight.

If it were me, I would trim some of the fat in Michigan government first and see how much that saves before diving into sales tax increases, fuel taxes, registration fee increases and the like.  We don’t need the Michigan Civil Rights Department or MIOSHA.  The feds offer up the EEOC and OSHA, which would be sufficient in Michigan like they are elsewhere.  We probably could get away with a part-time legislature like Indiana.  Once the fat is trimmed away, I would start looking at the options in earnest.  Personally, however, I think we overpay for gas in this State already and would hate to see us pay even more.  This might help gas station owners in Toledo more than it helps our roads.