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Michigan road funding: Initial budget bill missing $1.2B in new revenue sought by Gov. Rick Snyder

Wednesday, March 20, 2013   (0 Comments)
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LANSING, MI -- Michigan lawmakers began moving forward today on a new transportation budget that falls far short of Gov. Rick Snyder's call to increase road funding by $1.2 billion a year.


About $1.2 billion short, to be more precise.


A House appropriations subcommittee today approved a $3.4 billion transportation budget that does not include any new revenue from increased fuel and vehicle registration taxes, as proposed in the governor's $4.6 billion transportation recommendation.


Instead, the appropriations bill would cut $25.5 million in transportation funding from the current fiscal-year budget, despite inclusion of a $100 million general fund appropriation designed as a match to ensure maximum return from the federal government.


Republican Rep. Rob VerHeulen of Walker, who chairs the subcommittee, anticipates significant changes to the legislation moving forward. He called it a "baseline" budget specifically designed to make room for Snyder's road proposal or alternatives that may emerge in the legislature.


"We took the governor's budget, and where we didn't have the funding, we put a placeholder to send a message that we support the expanded investment in our infrastructure," he said, "but I don't think it's responsible for us to adopt a budget when the revenue source is uncertain or unknown."


Snyder, in his recent executive budget, proposed increasing gasoline and diesel taxes to the wholesale equivalent of 33-cents per gallon while raising vehicle registration fees by approximately 60 percent. By spending $1.2 billion a year over the next decade, he said, the state can avoid a $25 billion bill to repair damaged roads.


Several lawmakers on both sides of the aisle have criticized the governor's plan, but they have failed to rally around any specific alternative, including at least two ideas that focus on increasing the state's 6 percent sales tax and devoting the additional revenue to roads.


Related: Michigan road funding: See how much various proposals would cost taxpayers, generate for state


Mike Nystrom, executive vice president of the Michigan Infrastructure and Transportation Association, told committee members that failure to increase road funding this year will only exacerbate the problem in the future.


"The status quo is no longer acceptable when it comes to funding for our roads and bridges," he said. "…Although we recognize no solid agreement has come together, this budget continues us in the wrong direction by actually decreasing the investment made in our transportation system."


VerHeulen and fellow Republican Rep. Al Pscholka of Stevensville both expressed concerns with a road funding proposal based on fuel taxes and registration fees, suggesting they believe their constituents to be more amenable to a sales tax increase.


"The gas tax proposal just doesn't seem to resonate well, and part of that, I think, is that we're looking at $3.95 per gallon gas today, and that makes it really painful when you go to the gas station and you spend $50 to fill up the tank," VerHeulen said. "And so my sense is that a sales tax, at least in my district, seems to be more palatable. But the one thing that is consistent is that everyone is supportive of making the investment."


HB 4226 now heads to the full House Appropriations Committee for further consideration.

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