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Detroit Free Press: $1 billion more needed for roads, group says

Thursday, October 18, 2007   (0 Comments)
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Coalition warns of economic impact, 12,000 lost jobs

Cuts in spending on road and bridge construction could cost Michigan more than 12,000 jobs over the next three years unless the state raises an additional $1 billion a year in fuel taxes and vehicle registration fees, a coalition of business, government and labor groups backing the tax hikes said Wednesday.

Without an increase, funds for road building will drop by 40% by 2009, forcing companies in the industry to relocate and layoff employees and sending ripples widely across the Michigan economy, said Mike Nystrom, vice president of the Michigan Infrastructure and Transportation Association.

“Business doesn’t want to invest in a state that doesn’t invest in infrastructure,” Nystrom said, adding that an additional $1 billion in road funding is “the minimum that the state needs.”

The coalition, which includes the state’s most influential business lobby, the Michigan Chamber of Commerce, is seeking a 9-cent increase over three years in the state’s 19 cents a gallon gas tax; a 13-cent increase in diesel taxes (currently 15 cents a gallon) over the same period; and a 50% increase in registration fees.

Nystrom called on the Legislature to act before the end of the year to prevent job losses in the 2008 construction season.

Despite some bipartisan support for the measure, legislative leaders have been wary about enacting steep increases in fuel taxes and registration during a period of high overall fuel prices and general economic anxiety. Lawmakers also fear that public reaction to a significant tax hike of any kind so soon after the controversial decision to raise the state’s income and sales taxes would be overwhelmingly negative.

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