Gov. Gretchen Whitmer proposed a $3 billion long-term road funding plan Monday that would allocate all taxes paid at the pump toward roads, imposes $1.6 billion in new, unspecified taxes on large corporations, $500 million in government efficiencies and $470 million on a new wholesale marijuana tax.
The combination of new revenue and cuts is a middle ground that she said both legislative Republicans and Democrats will need to get on board with.
Whitmer’s MI Road Ahead Plan allocates “every penny” drivers pay at the pump to roads, closing a gap in funding that would put a total $1.2 billion toward roads. However, her plan says that this change will hold school funding harmless, but details about backfilling the School Aid Fund are yet to come. The basic concept is similar to what House Speaker Matt Hall (R-Richland Township) and other prior Republican speakers have supported.
Another $1.6 billion will be raised by making corporations pay their “fair share” to do business in Michigan and rebuild roadways proportionally to how their business causes wear and tear.
Her reason for increased contributions from corporations such as Amazon, X, Facebook and TikTok is that they use Michigan roadways to deliver goods or services, haul heavy weights in semi-trucks and “bombard Michiganders with nuisance pop up advertisements that inconvenience consumers.”
Higher fees on large trucks, digital advertising, iGaming and the corporate income tax are all rumored possibilities to get to that $1.6 billion, but nothing was particularly laid out. Two possibilities floated behind the scenes include a fee on Uber or other ride-sharing apps or a fee on Amazon and other product delivery services. Again, no specific tax increase has been formally proposed from the Governor’s office.
Whitmer said $500 million can be added to the road funding pot by cutting costs, an area that funds over $1 billion in Speaker Matt Hall (R-Richland Township)’s first two proposed plans.
Again, nothing in particular is mentioned as to where the Governor would trim costs.
Subjecting the marijuana industry to the wholesale tax that applies to other smoking products would add $470 million. The plan says that the marijuana industry recorded billions in sales in 2024 and has benefited from Michigan’s “industry-friendly taxes.”
Neither toll roads nor a vehicle miles traveled tax were mentioned as part of raising revenue for long-term road funding. However, the plan will come with $250 million for local bus services and new transit projects without stating where the funding will come from.
In a statement, Hall pointed out the increase in government spending since Whitmer took office, and how funding for roads wasn’t part of that increase.
“That’s why our approach focuses on our long-neglected local roads that people drive from their driveway to the highway and finally gives us a clear plan to fix them,” Hall said. “Michigan families expect results – that’s why our plan focuses on real solutions, including prioritizing funding roads over funding corporate earmarks, making the most out of our current budget instead of raising new taxes, and fixing local roads first.”
Senate Majority Leader Winnie Brinks (D-Grand Rapids) said Whitmer’s plan is an honest evaluation of what it takes to rebuild and repair roads.
“The Governor, Speaker, and I have all expressed a desire to find a long-term, sustainable solution and I believe that we can take this complicated issue that has plagued our state for decades and turn it into a major bipartisan win for all Michiganders,” Brinks said.
Lance Binoniemi of the Michigan Infrastructure and Transportation Association (MITA) said the association supports both Whitmer and Hall’s plans, and they’ll be happy to see the passage of whichever plan gets the Legislature’s support.
The Governor left open the possibility to create a 50-cent retail delivery fee while charging a wholesale tax on marijuana as non-traditional funding sources for transportation, but Binoniemi said MITA is open to anything that can raise significant money and get support in the Legislature.
“While we don’t have further details of the $3 billion proposal, we do have three plans to work off of and a looming road funding cliff. Besides bonding and other short-term fixes, the last time Whitmer took a stab at road funding included a proposed 45-cent gas tax increase in 2019.”
“In fairness to Dad, Gov. Whitmer probably would’ve called any speculation she wants to create a new marijuana tax and raise taxes by more than $1.6 billion ‘ridiculous’ and ‘nonsense’ back in that 2018 debate too,” said Rep. Bill G. Schuette (R-Midland) on X in reference to a 2018 gubernatorial debate between she and his father where she said his claim that she wanted a 20-cent gas increase was ridiculous.
Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter
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