The Building Tradesman Newspaper

Friday, July 24, 2015

News Briefs

By The Building Tradesman

Waiting, waiting for road funding plan

LANSING - State lawmakers had time to declare July as "Ice Cream Month" in Michigan, but there was no action to allocate money to fix the state's roads and bridges as the state Legislature adjourned July 15. House lawmakers were set to meet July 21, but there was little hope for a plan until they meet again on Aug. 18.

There are widely differing House and Senate plans to fund more than $1.2 billion per year to find road repairs. Despite both houses of the Legislature being controlled by Republicans, they haven't been able to come up with a compromise plan this year to send to the governor.

In June, 55 House Republicans (one short of what was needed for passage) voted for a "diesel parity" bill that would raise the state's 15-cent per gallon tax by four cents to match gasoline, and then allow both fuel taxes to rise with inflation in the future. That small tax increase was part of a larger road plan that relied primarily on dedicating existing gas tax revenues to roads, hoping for higher state revenues, while cutting funding to the Michigan Economic Development Corp. and eliminating the Earned Income Tax Credit, which helps lower-income people.

Democrats and groups like the Michigan Municipal League said they have great concerns about cutting the general fund revenue for future budgets if the gas tax money is diverted to the roads without being made up with new tax revenues.

The Senate Republican plan calls for $1.5 billion in new road repair money, with $800 million coming from a phased-in fuel tax increase that would eventually add 15 cents to the gas tax. The other $700 million would come from redirected state funds.

House Democratic Leader Tim Griemel (D-Auburn Hills) announced on July 14 a $1.2 billion Democratic plan to fix the state's roads. “Every time Michigan faces a problem, Republicans have forced everyday families to pay the price while giving corporations tax break after tax break. That’s wrong,” said Greimel. “Our plan fixes Michigan’s roads and bridges by requiring that corporations pay their fair share.”

In one of his first acts when he took office, Gov. Snyder signed a GOP plan to cut business taxes by $1.8 billion, paid for with nearly equal tax hike on senior citizen pensions. The Dem plan would take a $955 million bite out of that corporate tax break, while raising $255 million by prioritizing road work and "registration reforms and loophole closures."

The GOP may need votes by Dems to get compromise legislation adopted.