House Dems Funding Plan Pushes Pass-Through Parity Tax
June 25, 2019
House Democrats Thursday rolled out four alternative road funding bills that increase the 6% Corporate Income Tax another 2.5%, raise fees on heavy trucks and make pension income exempt from the income tax, and implements a flow-through parity tax of 4.25%.
The four bills also create a Rhode Island-style bridge toll program for trucks, which fits the caucus’ general theme of “If You Break it, You Buy it.” The bills are based on the feedback of thousands of residents at coffee hours and town halls across the state, said House Minority Leader Christine Greig (D-Farmington Hills).
“Instead of attempting to fix the roads at the expense of our children’s education, House Democrats are standing up for their future today with the introduction of these bills,” said Greig. “People from all over the state have made themselves clear. They want everyone to pay their fair share for the infrastructure we all use.”
All told, the bills are designed to bring in around $1.2 billion, half of the total that would be generated by Gov. Gretchen Whitmer’s proposed 45-cent gas tax plan. Greig said the folks her members talked to are OK paying more at the pump, but they believe the trucks that do the most damage to the roads should “have some skin the game.”
Business benefits from great roads, too, so they should pay “their fair share,” as well, Greig said.
“This is a shared responsibility to make sure everybody is working together. It’s not an accounting gimmick. It’s a true solution and everybody shares in the success,” she said.
Rep. Jon Hoadley’s HB 4780 creates the bridge toll idea. In Rhode Island, tolls are collected from large trucks along six major highway corridors at 12 locations. This would bring in an estimated $50 million.
Rep. Yousef Rabhi’s HB 4781 raises the corporate income tax by 2.5%, implements a flow-through parity tax of 4.25% and brings back the income tax exemption on pension income, which the House Dems referred to as “the harmful retirement tax.” This would bring in an estimated $800 million.
Rep. Tim Sneller’s HB 4782 creates the “Fixing Michigan Roads” fund, where the money generated from the corporate tax and vehicle miles traveled tax would go.
Greig did emphasize in her release how the idea for the bills came from “real everyday experiences of the people in our state.”
“We went to the source and we asked people in our communities directly, what do you want to see done about our roads? And we came up with a way to make that happen,” Greig said. “Good policy always starts at the ground level, and that’s where these policies came from.”
Ananich On Roads: ‘I Think We’re Making Progress’
Senate Minority Leader Jim Ananich (D-Flint) told reporters Thursday that he believes progress is being made on how Michigan should “fix the damn roads.”
“We’ve had a lot of good talks,” the Flint Democrat said. “I don’t think we’re getting to where we’re getting close to pen-to-paper yet, but [Senate Majority Leader Mike Shirkey (R-Clarklake)] seems to have a pretty good approach for his caucus. I’ll let him talk about that, but he’s thinking about things he talked about a little bit at Mackinac.
“I’m not divulging anything new, but the idea around value and accountability as one component with financing and funding being another. I think that’s a smart way to think about roads in my mind. I’m not an engineer and I don’t automatically think that way. But I think that’s a good way to look at the approach.
“As long as we can get to a place where we can have a comprehensive road plan. . . I think we’re moving in that direction,” the Flint Democrat continued.
MIRS asked if Ananich feels the trust factor is vitally important at this juncture.
“Yeah,” he said. “We had a good quadrant meeting the other day. I talk to the Majority Leader almost every day. I talk to the Governor and I talk to House leadership — both sides. I feel like we’re getting to a place where we can trust each other when we say something. That’s important.”
The Small Business Association of Michigan (SBAM) is directly opposed to increasing the CIT and implementing a new pass-through tax for small businesses and is working hard to keep both off of the table in budget negotiations.
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