Plan B eyed after Michigan voters crush tax hike for roads

AP News
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Posted: May 06, 2015 5:54 PM
Plan B eyed after Michigan voters crush tax hike for roads

LANSING, Mich. (AP) — Gov. Rick Snyder and lawmakers will be forced to consider an alternative to address Michigan's deteriorating roads after voters resoundingly rejected a ballot measure that would have increased taxes to pump $1.2 billion a year more into transportation infrastructure.

The long-running debate will again center on whether to hike taxes or reduce other government spending to boost funding for a network of highways, streets and bridges described as the country's worst by road-funding advocates and whose major source of revenue, fuel taxes, is not keeping pace with construction and snow-plowing costs.

But given the bipartisan ballot proposal's overwhelming defeat — a 4-1 margin Tuesday, the largest against an amendment since the current constitution was ratified in 1963 — higher taxes could be a nonstarter in a Legislature that is more conservative than the one that voted in December to put the constitutional amendment on Tuesday's ballot. Legislators appear reluctant to submit another ballot question to voters who accused them of passing the buck.

Republican House Speaker Kevin Cotter, a Proposal 1 supporter, said Wednesday he would propose a Plan B within days that is "very heavily dependent" on existing revenue to improve roads. He hinted at restricting additional spending in the $9.6 billion general fund and diverting economic development money to road repairs.

"The cost curve (of doing nothing) is going up by the day," said Cotter, who largely rejected the possibility of again sending a road plan to the ballot.

Snyder, a potential Republican presidential candidate who had urged passage of the measure, conceded that an influx of transportation spending this construction season is a lost cause but pledged to seek a comprehensive, long-term solution.

He failed last year to persuade enough lawmakers to approve fuel tax and vehicle registration fee increases through legislation. They also balked at his later push for an either/or option among tax hike proposals that would have let voters pick which way taxes would be increased.

Asked if there is now a no-tax hike mandate from voters, Snyder said he "wouldn't view it that way" and "people know we need better roads. The question is where do you get the resources to do that?"

The centerpiece of Proposal 1 was a 1-percentage point sales tax increase that would have eliminated the sales tax on fuel, restructured and doubled per-gallon fuel taxes and hiked vehicle fees boost the state's $3.7 billion transportation budget to $5 billion.

Voters crushed the ballot initiative for a number of reasons — an aversion to higher taxes, its complexity, angst over it being a constitutional amendment, concerns about disproportionately hurting the poor with the sales tax increase and unhappiness that more than $500 million in additional tax revenue would have gone to public transit, schools and law enforcement.

"They've been taking from us for years saying they're going to fix the roads," said Cheryl Mask, a 56-year-old state worker from Lansing who voted against the ballot measure.

The Legislature last increased the 19-cents-a-gallon gasoline tax in 1997. Michigan spends less on highways per capita than all but one other state.

Republican Senate Majority Leader Arlan Meekhof, who also backed the ballot initiative, said his first priority is passing the state budget but added the defeat shows voters want legislators to solve the problem.

"It took decades to come up with a compromise, and it will take time to come up with an alternative," he said.

Some supporters cautioned that voters want a proposal involving only road and bridge repairs and are not OK with cutting deeply elsewhere to free up money.

Democratic leaders, meanwhile, said "corporations" should pay their fair share for smoother roads after benefiting under a GOP tax overhaul four years ago, declining to detail specifics. Democrats worry Republicans could revive a 2014 House plan, opposed by Snyder, to divert money from schools and local governments for road and bridge repairs without hiking fuel taxes beyond inflationary increases.

"We were against that then. We continue to be against that now," House Minority Leader Tim Greimel said.

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Associated Press writer Alisha Green in Lansing contributed to this report.

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