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Snyder signs long-awaited road funding plan into law

November 17, 2015

Courtesy of MIRS News Service

The long-desired plan to eventually inject $1.2 billion into the state’s roads was officially made law Tuesday, thanks to the stroke of Gov. Rick SNYDER’s pen.

While Snyder and other allies heralded the plan as long-term, comprehensive and the largest investment in transportation in 50 years, the Governor still had to beat back questions over whether money would flow to roads quickly enough and whether funding roads would come at the expense of other budget priorities. 

The plan incorporates increased gas taxes and registration fees, a shift in General Fund dollars toward roads over five years, but also a bolstered Homestead Property Tax Credit and the potential for income tax relief as well.

The package is split between $600 million in new revenue and $600 million in shifted revenue to meet the desired $1.2 billion in additional funding that many have said the state’s transportation system needs. 

The final product was the result of a compromise between Snyder, who desired additional revenues for roads, and legislative Republicans, who were adamant after the defeat of Proposal 1 in May to find a road-funding solution that wasn’t just tax increase-based. 

The Governor’s desire for more road funding stretches back to his early days in office. Numerous legislative attempts to push a package through since then with new revenue failed, usually over Republican concerns of raising taxes. 

In May, voters rejected the complex road funding initiative known as Proposal 1 that would’ve raised the sales tax and made a number of other changes in an effort to reach a road funding solution. 

Soon afterward, the Legislature began work anew on a package that wasn’t solely tax increase-based. 

While the Governor was initially skeptical of the fiscal consequences of moving money around in the budget, his administration was able to find a way to consent to the plan presented today, which he and others insist is still fiscally responsible. 

Snyder and other supporters took the stage at the Michigan Infrastructure and Transportation Association (MITA) – an organization that has long demanded an increase to transportation funding — and insisted Michiganders would see better roads and bridges. 

The Governor’s entourage included Lt. Gov. Brian CALLEY, House Speaker Kevin COTTER (R-Mt. Pleasant), Senate Majority Leader Arlan MEEKHOF (R-West Olive) and Rich STUDLEY, president and CEO of the Michigan Chamber of Commerce, among others. 

Calley described the package as a “permanent, ongoing, structurally sound system for our roads and bridges.” But Meekhof also described it as “just a good start” that “we’re going to continue to improve upon.” 

Snyder said what was passed is a “comprehensive solution,” but agreed with Meekhof in saying, “we all believe in continuous improvement.” 

But critics continued to raise concerns about how long it would take to get the money into roads, as well as the shift of General Fund dollars away from other priorities. 

“We cannot afford to pay for our transportation infrastructure at the expense of our schools and communities, but that’s exactly what this plan does,” said Nathan TRIPLETT, Priorities Michigan project director, in a statement. 

The registration fees and gas tax increases are due to begin in 2017. But the first shift of General Fund dollars to help pay for roads won’t happen until Fiscal Year 2019. 

Snyder was asked when people would actually see improvements to their roads, given the phase-in wouldn’t finish until Fiscal Year 2021. He didn’t answer directly, saying, “we’re going to see progress on our roads.” 

Asked about pressures to the General Fund as a result of this legislation, Snyder expressed only optimism that the economy would grow to accommodate all of Michigan’s budget needs. 

“This is not about cutting someone else, this is about growing the pie,” Snyder said in response to a question about how he would prioritize any General Fund cuts. “Michigan’s economy has been growing, we’ve seen great growth, great additional resources, so this is investing those additional dollars out of the growth of Michigan’s future economy.” 

Later, asked how the roads investment could be sustained if the economy shrinks in the future, Snyder said, “I think we’re in a good position. You never take it for granted . . . anytime we have economic uncertainty and challenges, we always have to make adjustments.” 

Meanwhile, Democrats continued their offensive against the roads legislation that passed with mostly Republican votes. 

The Michigan Democratic Party (MDP) announced today it would be going after four lawmakers with radio and online ads to chastise them for supporting the “birthday tax,” and a plan that “will not even fix our state’s roads.” 

The lawmakers in question are Reps. John BIZON (R-Battle Creek), Tom BARRETT (R-Potterville), Jason SHEPPARD (R-Temperance) and Holly HUGHES (R-Montague), as Democrats explained these lawmakers were “deciding votes” on the package. 

MDP Chair Brandon DILLON and House Minority Leader Tim GREIMEL (D-Auburn Hills) slammed the road-funding plan for hitting “middle class and working families” with the “birthday tax,” a reference to the registration fee increases. 

Greimel and Dillon also characterized the General Fund cuts as amounting to $800 million that would impact schools, public safety and health care. 

The $800 million figure incorporates the hit from increasing the Homestead Property Tax increase, which Greimel said Democrats support in isolation but not with the other rearranging of General Fund dollars. 

Cotter shrugged off the Democratic attacks on his members, saying the move reinforces his belief that Democrats pulled out of the road negotiations for political reasons in an attempt to stick the ruling party with a loss heading into 2016 

“The fact that they’re running these commercials in four competitive seats underscores that point and makes it crystal clear to everyone,” Cotter told reporters today. 

Asked if they’re concerned that Democrats didn’t take part in the road funding solution that is now law, Greimel said, “We would’ve preferred to be part of a good road funding plan. Unfortunately, the only options the Republican majorities in the House or Senate were willing to even contemplate were variations on this very bad road funding approach.” 

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