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Snyder favors allowing voters to decide how to pay for highway upgrade

Friday, January 18, 2013   (0 Comments)
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From The Detroit News:


Mount Pleasant — Gov. Rick Snyder hit the road Thursday with his pitch for getting $1.2 billion more per year from drivers to repair Michigan's roads as key lawmakers began crafting a legislative plan that could include a vote on a statewide sales tax as early as May.


Bills could be introduced next week proposing the gasoline tax and higher vehicle registration fees Snyder called for Wednesday in his State of the State address, said state Sen. Roger Kahn, a Saginaw County Republican who is spearheading the transportation funding overhaul.


Kahn said he is proposing an alternative to charging drivers more to pay for road repairs by giving voters the option of amending the constitution to increase the 6 percent sales tax on all goods by 2 cents.


Snyder told The Detroit News' Editorial Board on Thursday he favors giving voters a choice — but reiterated that doing nothing will only exacerbate a growing road funding deficit.


"I'm pretty open to that," Snyder said. "It's giving voters a choice."


Snyder has said he'd prefer raising the extra money through a new percentage-based tax on the wholesale price of gasoline and diesel fuel and higher vehicle registration fees so "you're not asking other people to subsidize" road repairs through retail and food purchases.


If no quick solution is found, Kirk Steudle, director of Michigan Department of Transportation, said the department faces a $120 million funding shortfall again this year. Lawmakers plugged a similar shortfall last year with a one-time diversion of sales tax dollars usually used to fund schools and municipal revenue-sharing.


Whether lawmakers act solely on Snyder's proposal or also put a funding question before voters, action must be taken soon if lawmakers want to make a March 7 deadline to put the 2-cent road funding option on the May ballot, Kahn said. If voters OK the 2-cent sales tax increase dedicated to roads, it would negate any changes to the gas tax and registration fees the Legislature might take. It also would eliminate the 19-cent-a-gallon gas tax and 15-cent-a-gallon diesel tax, Kahn said.


The Legislature needs a two-thirds majority of both chambers to place a constitutional amendment on the ballot, and lawmakers can call a special election at any time.


Kahn and two other top lawmakers tackling the $1.5 billion annual road funding deficit spoke candidly Thursday at a convention of road builders in Mount Pleasant about the tough political sell the road funding issue faces.


Because of opposition among some conservative Republicans to raising taxes, the Legislature's majority caucuses will not likely be able to produce the minimum number of votes — 20 in the Senate and 56 in the House — needed to pass the gas tax and fee hikes without Democratic votes.


"We're probably going to need a few Dems," said state Rep. Wayne Schmidt, R-Traverse City, who noted about 25 of the 59 House Republicans are on board with either funding plan.


Help needed to pass bill


Schmidt, who said he backs Snyder's road plan, said proponents may need to do some political horse trading by securing passage of no-fault auto insurance reforms for certain Republican lawmakers on the fence about raising new road revenues.


"People would be more receptive to looking at a tax increase," Schmidt said, if it were linked to capping catastrophic claims on auto accidents in an effort to lower insurance rates for drivers.


"They're not directly linked, but it comes out of your pocketbook one way or another," Schmidt told members of the Michigan Infrastructure and Transportation Association.


Schmidt said he and Kahn have discussed luring Democrats to vote for the road plan in exchange for reversing cutbacks in the earned income tax credit, which Republicans gutted in 2011 as part of a plan to pay for a $1.8 billion tax cut for businesses.


Democrats have shown little interest in helping the Republican governor pass the bill after feeling Snyder betrayed them last month by signing a right-to-work law he long said he didn't want on his desk.


"Folks are going to be very leery of helping this governor out based on what happened last year," said state Sen. Virgil Smith, D-Detroit. "There's no real will to jump up and say 'lets go help the governor on his next proposal.' "


Democrats have 51 House members and 11 in the Senate.


Snyder said he is pitching the road funding plan as a way to save drivers money through fewer car repairs and less long-term infrastructure costs. Snyder acknowledged Thursday he's sticking his neck out, politically, by asking drivers to pay more.


"The politics about this are really bad," Snyder told The News. "In my view, that doesn't mean we shouldn't do it."


Better roads an investment


To an audience of nearly 500 at a Brighton Area Chamber of Commerce luncheon, Snyder repeated talking points from his Wednesday night address, which ended with a passionate plea for more revenue: New dollars will create up to 12,000 jobs and save up to 100 lives a year.


"We have a situation where if we really want better roads we have to invest more," Snyder said.


Snyder told chamber members his road funding target would cost motorists an average of $10 a month, $120 a year.


Brighton retiree Dave Senak said Snyder wasn't his choice for governor, but he's now convinced the self-professed nerd knows what he's doing.


"Everything he said was right on the mark," Senak said. "He's got a plan. If he thinks it's in the budget, I'm in favor of it."


Rick Cebulak, semi-retired from a security contractor, is worried about the hit he'd take with higher road fees or taxes on top of the $270-a-year levy two recent local bond issues will add to his property taxes.


"All I know is it's going to cost me more ... (and) I just got clobbered," Cebulak said.


At the road construction industry convention, Mark Johnston, president of Troy-based Ajax Paving Industries, said he hopes the Legislature doesn't simply pass the issue off to voters to decide in a statewide ballot question that are historically defeated.


"If taxpayers don't pass it, we'll never get it voted on for a decade," Johnston said.

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