The Building Tradesman Newspaper

Friday, April 17, 2015

Trades could have a lot riding on Proposal 1

By Patrick Devlin, Secretary-Treasurer

The Michigan Building and Construction Trades Council is supporting Proposal 1 - the May 5 statewide ballot issue that focuses on raising the state sales tax in order to increase spending for the state's deteriorating roads and bridges.

There's a lot going on with Proposal 1, and ideally, the ballot issue would simply ask voters if they support increasing the sales tax, or the gas tax, or accept some other fee or tax, in exchange for allocating more money to repair Michigan's deteriorating roads and bridges, which get worse every day.

But rarely is our state Legislature in the habit of doing anything "simple" these days. Led by Republican majorities in both the House and Senate for the past several years, the makeup of our state lawmakers grew even more conservative, and even more anti-taxation, with the results of last November's election.

That added to the urgency for the last term's conservative lawmakers to do something to fix the roads before the end of last year. They couldn't bear to put a black mark on their legacy by agreeing to a tax hike (even though the state gas tax hasn't been raised since 1997), but they barely came to an agreement with minority Democrats to let voters decide the matter, and that's how we got Proposal 1.

Yes, Proposal 1 has significant flaws. It was birthed by a Legislature too cowardly to raise taxes on their own. So they threw it to the voters, and yes, in an ideal world, the proposal would only ask the electorate for a straight up or down vote on whether they want to tax themselves more to increase funding for road repairs.

Instead, in order to get necessary support for the ballot issue from Dems, the proposal got more complicated - but that's not all bad. At the heart of Proposal 1 is the increase of the state sales tax by one penny, to seven cents on the dollar. That action would allocate more than $1.2 billion more every year to repair the state's roads, although it would take several years for that full amount to be spent  because MDOT needs to pay off debts from construction that's already in place.

Passage of Prop. 1 would also move about $261 million to the working poor in the form of an expansion of the Earned Income Tax Credit. (Many of our own members could benefit from this tax credit during extended employment layoffs). It would allocate some $40 million for local school districts with large "at-risk" populations. There's also a small expansion of the state's Homestead Property Tax Credit for low-income seniors and people with disabilities.

To get to the bottom line on those allocations, the proposal would also shift all manner of money around state government, by removing the sales tax from fuel sales, amending the allocation for "use tax" under the General Sales Tax Act, and reallocating money for the School Aid Fund, among others.

Passage of the ballot issue would also allow more local competitive bidding on road projects. Heavy commercial trucks would pay higher registration fees. Buyers of new cars would lose their registration fee discounts.

It's going to be easy for Michigan voters to look at the complexity of Proposal 1, and vote "no," or not vote at all. In fact, polling shows the ballot issue is in trouble. But there are very good reasons to support it.

Michigan spends less on road work than any other state in the nation, and all drivers have to put up with the threat of concrete falling from overpasses and dodging potholes.

The building trades, and for that matter, nearly all of organized labor in the state, are on board with endorsing Proposal 1's passage. The trades, or course, have a direct, vested interest: the Federal Highway Administration estimates that every $1 billion in road spending yields 13,000 construction jobs.

Those are good, permanent jobs for our workforce. Combined with better, safer roads for our state, and not knowing what the Legislature is going to come up with if Proposal 1 fails - a "yes" vote is the best option for Michigan's building trades workers.