Business blog: Lansing to begin fresh talk on roads bills

LANSING ‒ House Republicans have pitched a 12-bill funding package to improve Michigan’s failing roads, the first official Plan B since state voters crushed a ballot proposal earlier this month.

The bills, introduced Thursday, will bring on fresh talks in the Legislature starting this week about how to pay for work on the state’s crumbling infrastructure that could last through the summer if lawmakers aren’t able to reach a deal before session breaks in June.

They have been referred to the new House Committee on Roads and Economic Development. The committee is scheduled to take up three of the bills relating to competitive bidding and warranties on road projects on Thursday. Hearings on other bills are set for May 26 and June 2.

The bills reflect a plan presented last week by House Speaker Kevin Cotter, R-Mount Pleasant. Cotter proposed raising more than $1 billion by 2019, with much of the new money coming from what he characterizes as anticipated state revenue growth.

But he also proposed eliminating the Earned Income Tax Credit for low-wage workers to save $117 million, as well as taking $185 million from economic development programs that include the 21st Century Jobs Fund, tribal gaming compacts and film incentives.

Cotter’s plan would raise another $45 million through initially raising the tax on diesel fuel from 15 cents to 19 cents to match that of regular fuel and by charging fees to drivers of hybrid and electric vehicles.

House Democrats oppose the proposal’s reliance on undetermined future revenue, calling it “at best, a Band-Aid approach that won’t guarantee that roads will be repaired or maintained now or in the future.”

Democrats maintain they want a long-term roads deal that requires corporations and the wealthy to pay more and avoids cuts to schools, local governments and health care.

The roads bills are HB4605, HB4606, HB4607, HB4608, HB4609, HB4610, HB4611, HB4612, HB4613, HB4614, HB4615 and HB 4616.

Like what you’re reading in Bridge? Please consider a donation to support our work!

We are a nonprofit Michigan news site focused on issues that impact all citizens. In an era of click bait and biased news, we focus on taking the time to learn both sides of a story before we post it. Bridge stories are always free, but our work costs money. If our journalism helps you understand and love Michigan more, please consider supporting our work. It takes just a moment to donate here.

Pay with VISA Pay with MasterCard Pay with American Express Donate now

Comment Form

Add new comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

Comments

sue
Mon, 05/18/2015 - 10:41am
As if anyone in Lansing is listening. LISTEN to more than the no tax, no how folks. Chamber of Commerce, business, trucking, unions and voters in E Grand Rapids, city of Grand Rapids, pay attention to us! We need safe roads and infrastructures. We even raise our local millage to get them. And this is not the time to cut schools when businesses say they need workers with 21st century skills. You all moved fast enough to pass right to work, think you could hustle a bit now. Quit the media shows "telling"us we trounced prop1 because we said no to taxes. We didn't want to sort thru the goulash to find a morsel of meat.
Jim Fuscaldo
Mon, 05/18/2015 - 11:00am
The Solution to Funding Michigan's Road Repairs Requires Leadership, Bold Decisions and Creative Financing. The voters rejected Proposal 15-1. This forces a “do over” in Lansing. What should be Plan B for the immediate term? Raise cash by significant cuts in corporate welfare spending! For the long term implement Plan C that would create a restricted “capital fund” solely for the repair of existing roads and bridges. Plan B would cut Michigan’s corporate welfare programs that received a financial boost in Governor Snyder’s 2015 budget. According to the Mackinac Center eliminating the Michigan Economic Development Corporation would result in a savings larger than $300 million in 2015. Eliminating film subsidies and other corporate welfare programs buried elsewhere in the budget would incrementally add to the “pot” for road repairs. The revenue the MEDC receives from tribal gaming operations should be redirected to funding the roads. Plan B is a start. What is Plan C? In the financial world leveraging of assets is a means to raise capital. Capital is what the state needs to fix the roads. The state has several significant assets in Interstates 94 and 69 that are part of the NAFTA superhighway. The NAFTA superhighway in Michigan is a planned project for MDOT that will connect with the International Bridge. Interstate 96 is another significant asset. The legislature must evaluate leasing these assets to a Public Private Partnership (PPP). This will raise capital to fund a permanent and protected “capital fund” used solely for road and bridge repairs throughout the state. We need leaders in Lansing with experience in creating complex financial partnerships to propose legislation permitting the use of PPP’s in Michigan. To those who say we cannot do this for legal reasons please cite the relevant law, statute or contractual limitations that prevents this. In short SUBSTANTIATE your negative rebuttal. Twenty-four states have enacted legislation authorizing PPP’s. Michigan has not. In 2009 House Bill 4961 was introduced to authorize MDOT to enter into PPP’s. It failed for good reason. It was built on the model of pledging future toll revenue against debt secured by bonds. Lansing must trash the model that taxation and bond debt are the only way to fund state road repairs. There should be legislative efforts for a thorough unbiased financial and economic evaluation conducted by independent analysts of road PPP’s implemented in other states and foreign countries. This analysis should include a comparative review of all current models for PPP’s. The Pew Center on the States has identified ten different models. The analysts should not be an extension of MDOT or the Governor’s administration. Why? This leads to administrative bias and “sealed container thinking.” A reason why Pennsylvania’s proposed PPP failed. The National Conference of State Legislatures has prepared a toolkit for state legislatures on PPP’s for Transportation. The Pew Center on the States has prepared an excellent “Do’s and Don’t’s" analysis for PPP’s based on a critical analysis of Pennsylvania’s failed efforts for a transportation PPP.  Legislators and their staffs should review this material to understand the substantive benefits of PPP’s. They should validate their perceived negative aspects of PPP’s with facts based on financial analysis, not perceptions, rumors or hear-say. Michigan should look to Indiana that raised 3.8 billion dollars with a PPP that covers 156.9 miles. Michigan’s road funding will not be resolved until we have creative financial leadership in Lansing and eliminate crony capitalism. It will not be resolved by raising and / or shifting tax revenue, or dealing for votes to increase taxes by agreeing to share the tax bounty with special interest groups unrelated to road and bridge repairs. The use of creative financing based on private investment alleviates the need for federal funding. As a result “prevailing wage laws” required by the Davis Bacon Act can be avoided. Tolls and fees collected by a PPP is taxable income to the private investors thereby generating additional tax revenue. Repeal of Michigan’s “prevailing wage law” would reduce the cost of road construction labor. Where are the creative and bold leaders in Lansing? Both Congress and the U.S. Department of Transportation are supportive of PPP concessions. The House Transportation and Infrastructure Committee created a bipartisan panel on the value of PPPs for transportation infrastructure. It prepared a report titled “Public Private Partnerships: Balancing the Needs of the Public and Private Sectors to Finance the Nation’s Infrastructure”. There are currently 30 long term highway PPP’s stretching from Vancouver, Canada to Orlando, Florida ranging in value from 600 million dollars to 3.85 billion dollars.
John Darling
Sun, 07/26/2015 - 7:34pm
In short you are talking toll roads for MI. No thanks. MI businesses have had massive tax breaks at the expense of the little guys ... Time for the corporate world to pony up some money and help the state out.
blufox
Mon, 05/18/2015 - 11:35am
TWELVE Bills!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! If the road fix plan can't be written on a napkin, there is something wrong. Lansing is apparently occupied by neutered, single minded fools
Geoffrey
Mon, 05/18/2015 - 6:02pm
Raise the revenue by economic growth, but cut economic development. Raise revenue by cutting a credit to workers who can't afford to drive. Raise fees on hybrid cars and EVs. 12 Bills? How about they take the sales tax off gas and raise the tax on gas and diesel to 40 cents? Allocated to the roads.
Leon L. Hulett, PE
Mon, 05/18/2015 - 7:08pm
Lindsey, It is not that complicated. Use the existing Gas Tax for Roads. Let voters have the chance to say, "Yes!" to Excellent Roads. To just one simple thing. Michigan Drivers are now paying $300 plus per year each in "pot hole damages." How much does that add up to? MDOT could use some belt tightening: 15 or 18 paid holidays per year? Sears has 5.