Michigan Ballot Measure Addresses Transportation, Education Funding
More than a dozen state legislatures appear poised to consider gas tax increases this year, but Michigan will take a path less traveled when voters go to the polls May 5 to consider a complicated ballot measure that would provide an extra $1.2 billion a year for state roads.
The ballot measure is a bipartisan compromise that supporters believe is the state’s last best hope for dealing with a long-term funding problem impacting both transportation and education. Proposal 1, a legislatively referred constitutional amendment, would:
Eliminate sales and use tax on gasoline and diesel fuel. The revenues from that sales tax currently go to schools.
Increase the state’s general sales and use tax from 6 percent to 7 percent. The increase is expected to generate more than $1.6 billion per year, with $1.2 billion going to roads and $130 million to transit.
Dedicate 60 percent of the first 5 percent of the sales tax and an amount equal to 12.3 percent of the first 5 percent of the use tax to the school aid fund—about $300 million in all.
Dedicate 15 percent of the first 5 percent of the sales tax to be used for revenue sharing with townships, cities and villages—about $95 million.
Republican state Sen. Tom Casperson, who chairs the Senate Transportation Committee, said Michigan’s unique situation required a unique solution.
“If you look at the Michigan gas tax, we’ve been putting ourselves at a disadvantage for years because we placed a sales tax on gasoline years ago … (and) the lion’s share of that money does not go to the roads,” he said. “It’s constitutionally dedicated to other sources. We have a fairly high gas tax if you put it all together. … We’re right in the ballpark with other states around us as far as the amount of taxation on gas. The problem is where it goes.”
Since the dedication of the sales tax was written into the constitution, the legislature couldn’t simply make the change on its own, Casperson said. With the sales tax increase, lawmakers saw the opportunity to solve the funding challenge in transportation and fill the hole in education funding left by eliminating the sales tax on fuel.
If the measure is successful, he said, “now you just cleaned up both entities for the long haul. You’ve got education taken care of for the years to come. You’ve got transportation funding that has been now changed so that all of it’s dedicated to the roads. And I believe—if we get it—you’re not dealing with this (issue) every two or three years.”
But the Michigan ballot measure may be facing an uphill climb. An early February statewide poll by The Detroit News found an even split among likely voters—37 percent in support, 37 percent opposing with 26 percent saying they were unsure. Political analysts say ballot proposals in Michigan need to start with 60 percent support or higher to have a chance at passage.
“I was somewhat encouraged that there were quite a few (poll respondents) actually that appeared to be open-minded to at least listen to the debate and they hadn’t made up their mind yet,” said Casperson. “If we can explain to people the dilemma we’re faced with here, I think some people would go the other way and support. … We need to get out there and let people know what’s happening here.”
Proposal 1 is facing an opposition campaign led by groups like the Coalition Against Higher Taxes and Special Interest Deals. The coalition’s leader is businessman and former Republican congressional candidate Paul Mitchell.
“We think Proposition 1 is the perfect example of the intersection of bad policy and bad politics,” he said.
Mitchell said the legislature hasn’t done its job to make the case that state government deserves more money.
“To say that there’s not a single way to save money in the state budget and it has to be a tax increase because that’s the only way to fix this problem, no one’s buying that; I don’t buy it,” he said. “You start with efficiently and effectively utilizing the resources that the taxpayers give you and when you’ve done that, I think you have a place to (say) ‘We need to do this and we need to raise taxes to do that.’ … Meanwhile they’re telling the voters this is a roads package. Well, it’s a roads package along with a whole lot of other stuff.”
Mitchell said one thing opposition groups aren’t saying is that they’re not in favor of, or don’t care about, safer roads in Michigan.
“I drive the same roads that the governor does,” he said. “The roads are not in good condition. That’s not the point. The point is how we fund them, how much it takes to fund them and then why we’re paying a ransom to all these other groups. It’s bad policy. We need to fix the roads. We need to put more money into our roads. We’ve got to focus on how to do that, but we ought to start by focusing on how we can be a more efficient state government.”
Support for Proposal 1
Meanwhile, supporters of Proposal 1 have marshaled plenty of evidence that Michigan needs to do something about its infrastructure soon.
“The roads don’t lie,” said Casperson. “All you’ve got to do is look at them. I live an hour from Wisconsin. … Wisconsin puts roughly 31 cents a gallon toward their road infrastructure. Michigan puts 19 cents toward their road infrastructure. If you drive into Wisconsin, … it’s like night and day.”
“Michigan invests less per capita in transportation than any state in all of America,” said Roger Martin, a partner in the Lansing-based public relations firm Martin Waymire, which represents the Prop 1-supporting construction trade group, the Michigan Infrastructure and Transportation Association. “That’s why Michigan’s roads aren’t just bad. They were bad 10 years ago. Now the condition of many of our roads and bridges is simply dangerous. Thirty-eight percent of Michigan’s state- and locally owned urban roads and 32 percent of the state’s state- and locally owned rural roads are in poor condition.”
Martin and others see Proposal 1 as the state’s last, best hope for tackling those needs.
“Voters need to realize this is the only chance our state has to fix our roads in a substantial way,” he said. “There is no chance the legislature will vote to provide $1.2 billion for transportation, as this proposal does. People want perfect from the legislature, but anyone paying attention knows that’s never going to happen.
“The governor, the Republicans who control both legislative chambers, and the Democrats who are in the minority all have cautioned that if Proposal 1 fails, we cannot expect to find major additional revenues for roads, and we can expect massive cuts to other essential services, such as public safety, education, health care and funding for local services.”
Nevertheless, a January editorial in The Detroit News was critical of the measure and called on the legislature to go back to the drawing board on a new funding approach.
“(It) was only signed by the governor because a cowardly legislature failed to do its job during the (2014) lame duck session,” the editorial said.
Martin believes the “Vote Yes” campaign ultimately will succeed thanks to the support of a diverse coalition.
“Nearly every major police, sheriff and firefighter organization in Michigan supports Proposal 1 because the dangerous conditions of our roads and bridges threaten the safety of first responders when they are trying to do their jobs,” he said. “Our coalition now includes more than 75 public safety, business, labor, education, local government, children’s advocacy, tourism and agricultural organizations from across the state.”
A Cloudy Forecast
Mitchell said the “Vote No” position has won champions as well. He points to support from newly elected Michigan Republican Party Chair Ronna Romney McDaniel and freshman Democratic U.S. Sen. Gary Peters. Tea Party-affiliated groups, anti-tax activists and the Green Party also have expressed their opposition to the measure.
“When you get influential Republicans and influential Democrats both saying ‘it’s a mess,’ mark that down on your calendar because that doesn’t happen every day,” he said.
The ballot measure may face additional headwinds because it will be voted on during an off-year election when the only other things on the ballot are local municipal and school board elections. Turnout could be light. But Martin points to a 1994 vote on an education-related statewide ballot measure that produced 2.4 million votes, a pretty good showing in the state.
Nationally, sales tax ballot measures for transportation have proved to be a difficult sell in other states in recent years. In 2012, voters in nine of 12 regions in Georgia rejected a local option sales tax to fund regionally selected transportation projects. After telling voters there was no Plan B to the local option sales tax approach, lawmakers are just this year considering what a Plan B might look like. A House committee last month approved legislation to raise $1 billion a year in new transportation funding by replacing the state sales tax on gasoline with an excise tax of 29.2 cents per gallon and charging electric vehicle owners an annual fee.
Missouri voters in August defeated a constitutional amendment that would have increased the state’s sales tax to fund key infrastructure projects. Dave Nichols, the outgoing director of the state department of transportation, warned in January that his department will see such severe budget cuts that they’ll soon be able to maintain only a small fraction of the state’s 34,000 miles of road. By 2017, the state won’t be able to afford its required federal match in order to receive federal funding. The state’s transportation budget already has been cut nearly in half since 2009. Missouri lawmakers and Gov. Jay Nixon have discussed a small gas tax increase that wouldn’t require voter approval or tolling on Interstate 70 to bring in additional revenues.
Proposal 1 supporters in Michigan hope to learn from those noted defeats and convince voters to say yes to the plan on May 5. Despite accusations that the legislature shirked its responsibility by sending the question to the ballot, Martin believes voters are more than qualified to make the call on what’s best for their state.
“Michigan voters dodge and swerve their way along tens of thousands of miles of crumbling and dangerous roads and bridges every day on their way to work and to drop their kids off at school,” he said. “They have seen TV news stories here about concrete chunks from Michigan roads and bridges crashing through the windshields of cars with moms and children. They have heard and read media stories about potholed roads hampering ambulance drivers, firefighters and police officers responding to fires, accidents and crimes scenes, and trying to transport patients to the hospital. Michigan voters are well equipped to vote yes for the public safety and road funding guarantees in Proposal 1.”
“Transportation Funding Measures Advance in Georgia, Iowa, Washington State,” CSG Capitol Comments Blog Post, Feb. 20, 2015.