As another winter continues on, the pothole situation here in Michigan is not getting any better. In fact as we already know, another harsh winter has already created massive problems for motorists throughout the state. This February is currently on pace to be one of the coldest on record and when the inevitable thaw occurs in March, things will only go from bad to worse.
Yet, even after the fiasco of pothole season last year, our state legislature, and Governor Snyder in particular, did nothing but kick the can down the road. No resolution to fund road repairs passed the state legislature last year, this despite the fact the Republican Party firmly controlled both the state house and state senate and have a friend in Governor Snyder.
This year, state funding to fix our roads remains in Republican control. Instead of taking quick action, the state legislature naturally passed the buck onto state voters. Yesterday, the Board of State Canvassers approved official language for Michigan Proposal 1.
Proposal 1, which is going before voters on May 5, 2015, is a sales tax and road funding measure. If passed, it would raise the state sales tax from 6% to 7%. It would also increase the gasoline and diesel fuel tax as well as increase vehicle registration fees. The added revenue would go towards supplementing the reduced revenue legislatures stole from the School Aid Fund to balance the budget, as well as provide money to repair state roadways.
If passed by voters, it is estimated Proposal 1 would generate an estimated $1.25 billion annually in revenue.
There are problems with the passage of this Proposal however. Most notably, a sales tax is a regressive tax, meaning it hits middle class and low income citizens the hardest. It also hurts every day citizens making purchases on basic household items, while giving businesses and their owners a free pass.
Additionally, conservative Republicans and tea party groups are against the Proposal because it means an increase in taxes. A recent poll performed by Bernie Porn at EPIC-MRA showed that instead of increased funding for road improvement and K-12 education, 60% of tea party voters supported a plan to actually decrease the state income tax. Republican legislatures, well aware of their tea party supporters’ anathema to taxes, are highly unlikely to be in favor publicly of Proposal 1.
A common refrain I’ve heard by people is that instead of increasing taxes to pay for roads, other state programs should be cut to fund road improvements. Although this is great in theory, and a wonderful campaign slogan, I’m not certain what these people are referring to. Medicaid has been to the bone over the last decade. FIA and other social welfare programs have also been cut substantially. Our state legislature, led by Governor Snyder, has already raided the School Aid Fund to pay for a budget deficit caused by prior tax cuts.
I don’t think there are any easy answers. I do know and understand that the roads need to be fixed, and fixed quickly. I think the elimination of the Single Business Tax (SBT) and its replacement with a 6% Corporate Income Tax was great in theory, but did not adequately replace the lost revenue. We are now paying the pied piper. I also think the state legislature is shirking its responsibility by shifting responsibility to the public in the form of Proposal 1 – a proposal that is poorly worded and will be widely confusing to voters on May 5.
I am hopeful our state can solve the road repair problem in a meaningful way. However, it will take tough choices by our state’s elected officials. Unfortunately, Proposal 1 is not that tough choice.