Report: Michiganders divided on road funding options, just like Lansing

Thirty-five percent of Michigan residents who participated in a Center for Michigan survey said they would be willing to give the state $100 more each year for roads, while 36 percent said they preferred to pay the same amount they do now, according to a new report.

Michigan residents agree with Gov. Gretchen Whitmer and infrastructure experts who say Michigan’s roads are in bad shape, and will get worse if the state doesn’t invest to fix them.

But there is little consensus on solutions, from the amount of extra money Michigan policymakers should set aside to the source of any new funding, according to a study released Tuesday by the nonprofit Center for Michigan.

The report’s findings mirror the lack of consensus among policymakers in Lansing about how to pay for the state’s crumbling roads and infrastructure. Republican lawmakers, who rejected Democratic Gov. Gretchen Whitmer’s proposed 45-cent-per-gallon gas tax increase, have not yet released their own road-funding plans to counter hers. Whitmer says she won’t sign off on next year’s budget if it does not include enough revenue to solve the state’s road-funding problem.

Related: See how much a 45-cent Michigan gas tax might cost you

The Michigan Department of Transportation has said Michigan needs to invest at least $2.5 billion more per year than it currently spends to get most roads into good and fair shape within a decade, a figure confirmed by independent experts.

The Center for Michigan surveyed more than 4,100 Michiganders through online polling and three conferences held across the state in April. Among its findings:

  • Michigan residents are as divided as policymakers on the best way to raise revenue. Seven options to generate money for roads, from gas taxes and sales taxes to bonds and registration fees, failed to generate a majority of respondents’ support.
  • More than 75 percent of respondents believe the state should spend at least $1 billion extra annually on roads; just about a third supported spending $2 billion or more.
  • Michiganders have their eye on their own budgets: 35 percent of respondents said they would be willing to give the state $100 more each year for roads, while 36 percent said they preferred to pay the same amount they do now.

“Poll results indicate some momentum for generalized ideological paths forward, such as cutting spending or increasing taxes, but approval comes crashing down when residents are presented with the specific ideas currently being discussed by experts and policymakers,” the Center for Michigan report states. [Disclosure: Bridge Magazine is a part of the Center for Michigan, but Center employees had no role in the reporting or writing of this article.]

Whitmer in March unveiled her $2.5 billion proposal to fix Michigan’s roads. It hinges on a gas tax increase of 45 cents per gallon, spread out over a year, and giving the most funding to state freeways and roads that carry the most traffic.

August 2019: Pressure builds on Michigan Republicans for roads plan to avoid shutdown
Related: Pressure builds on Michigan Republicans to share their road funding plan

The new gas-tax revenue would be kept in a new fund and doled out based on how heavily roads are used. The current gas tax of 26.3 cents per gallon, as well as the 6 percent state sales tax currently paid on fuel, would remain in a state formula that divides the money between the state, counties and cities.

Senate Republicans this month left Whitmer’s proposed gas tax increase out of their proposed roads budget, instead voting to spend $132 million to fully phase in a $1.2 billion road-funding package a year earlier than scheduled.

That 2015 legislation includes $600 million in diverted income tax dollars and another $600 million from previous increases to Michigan’s gas tax and vehicle registration fees. Infrastructure experts agree, however, that the 2015 package does not raise enough money to fully address road repairs.

Sen. Wayne Schmidt, R-Traverse City and chairman of the Senate’s transportation budget subcommittee, told Bridge that the 2015 package “has made a great start,” but acknowledged Michigan does need more investment in roads.

The $132 million in the Senate’s roads budget is earmarked for county and city roads. The Center for Michigan’s study found that more than a third of respondents said they wanted the local roads they drive on most fixed first, with state highways ranking lowest in priority — “despite the fact state highways carry more than half of Michigan’s passenger traffic and roughly three quarters of commercial and trucking traffic.”

Related: Here are 9 ways to build better roads in Michigan, from old tires to pig poop

“Many times, people say, ‘Oh, all the roads are bad,’ but they’re not all bad. Many times, it’s a local road that they take consistently to work or to school or church,” Schmidt told Bridge last week. “We have to make sure that they see (improvement) on their local roads, the roads they take consistently.”

Senate Majority Leader Mike Shirkey, R-Clarklake, has said the Senate will focus on longer-term road funding, including conversations about new revenue, separately from the 2020 budget.

The House has not yet passed a roads budget for the new fiscal year that starts Oct. 1.

House Speaker Lee Chatfield, R-Levering, has said the root of Michigan’s road-funding problem is that the sales tax paid on gasoline purchases does not go to roads. It instead goes primarily to K-12 schools.

Addressing the sales tax paid on gasoline was among several options that did not gain a majority of respondents’ support, according to the Center’s study.

Some respondents to The Center for Michigan’s survey shared concerns that raising gas taxes could have a disproportionate impact on lower-income residents. The gas tax is often considered a user fee, since it’s borne more heavily by people who drive the most.

Republicans have also said they wanted to focus first on passing legislation to reform Michigan’s no-fault auto insurance system in an effort to lower drivers’ car insurance rates before they tackle road funding.

GOP legislative leaders reached a no-fault compromise with Whitmer late last week, and the House and Senate voted to adopt it in a rare Friday session.

“The reality is, nobody likes new taxes, nobody wants more fees,” but they want safer roads, Sen. Adam Hollier, D-Detroit, told Bridge last week.

Hollier, who sits on the Senate’s transportation budget committee, opposed his chamber’s roads budget because it doesn’t include long-term revenue.

But he supports the no-fault compromise, saying lower car insurance rates will offset higher gas taxes for roads. And, he added, better roads also will mean drivers spend less money annually fixing damage to their cars.

“What I think there is clear consensus (on) is that it needs to be guaranteed revenue,” Hollier said. “The only way to do that is the gas tax.”

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Comments

Kevin Grand
Tue, 05/28/2019 - 7:24am

"Republican lawmakers, who rejected Democratic Gov. Gretchen Whitmer’s proposed 45-cent-per-gallon gas tax increase, have not yet released their own road-funding plans to counter hers. "

Wow!

I can only surmise that Ms. VanHulle doesn't bother to read her own website?

https://www.bridgemi.com/guest-commentary/opinion-my-michigan-roads-plan...

https://www.bridgemi.com/guest-commentary/opinion-hell-no-gov-whitmers-n...

And that hike everyone has seen at the Sec. of State offices for their registration & plates? The perpetual gas tax hike jammed through without any public support?

Did everyone forget about this already?

"The gasoline tax of 19 cents a gallon will increase by 7.3 cents and the diesel tax of 15 cents a gallon will go up 11.3 cents, WITH AUTOMATIC ANNUAL INFLATIONARY ADJUSTMENTS in 2022 and after. Vehicle registration fees will rise 20 percent. "

Those were imposed by republicans.

https://www.crainsdetroit.com/article/20151110/NEWS01/151109806/snyder-s...

And The Center for Michigan wonders why it cannot get any traction on its attempts to sway pubic opinion for another gas tax hike.

Lennie
Tue, 05/28/2019 - 8:50am

Most have no problem with proper funding. But the blatant diversion of revenue from roads via fuel taxation to supposed school funding with the same increase is DOA.

Gretchen Granholm struck out with the proposal. This is a national issue that should be addressed without the usual stupidity of partisan politics and braindead "journalists". IOW, tell us the truth and give us a solution without idiotic buzzwords like "regressive taxation". We want accountability not the typical blame shifting and finger pointing.

Michigan Observer
Sun, 06/02/2019 - 2:46pm

I am having difficulty understanding Lennie's point. Let us suppose that we did spend the money currently diverted from the roads to education on roads and then raised taxes to replace the money that education currently receives from the sales tax on fuel. What would be the difference between that, and raising gas taxes for the roads? We would still be paying the same additional taxes to fix the roads.

Murlene McKinnon
Tue, 05/28/2019 - 9:04am

I am wondering where the lottery earnings that I thought were designated for schools went.
I believe I recall that they were diverted. Is this why part of the sales tax goes to K-El. ED.?

Frank Koob
Tue, 05/28/2019 - 9:12am

Governor Whitmer was up front with her plans to raise money four roads through and increased gasoline tax. The citizens of Michigan overwhelmingly elected Whitmer. Let's support her sales tax increase. Perhaps if we gave her half of the sales-tax she wants and create a formula for the state income tax that covers the rest, we would all be happy when our local and state roads are fixed.

Dale
Tue, 05/28/2019 - 9:21am

Any increase in taxes, must also guarantee that current funding for the roads is not decreased. We have had too many bait and switch schemes in the past. The lottery is case in point. All of the lottery money was supposed to go to education, and to my knowledge, it does. But that let the legislators decrease the money flowing from the general fund that used to support education. It did not increase funding for schools. It merely switched the source of funding, so in a way, the lottery money is padding the general fund.

Matt
Tue, 05/28/2019 - 11:41am

Dale ... that's what the whole thing is! Whitmer is taking monies already supposedly directed to roads and redirecting them to schools DEQ etc. To make up for this decrease she boosts the fuel tax up extra!

Gary Wood
Tue, 05/28/2019 - 10:42am

I looked over the survey results in the report. I also attended one of the conferences. My take on this is that people see a problem. People that attended a conference probably received a little more background to educate them on the issues and solutions. You can see by the results that a real solution (gas tax being the choice) was desired. It appears that the online and formal polling showed that people see a need but don't want to pay for a solution. That about sums it up for me.

duanw
Tue, 05/28/2019 - 2:56pm

In the conference you attended how much time and how many participants were talking about the quality of the roads/bridges, about the quality of maintenance, about new technologies to be used, about ensuring the value we will be getting for our added taxes?

Jim Pearson
Tue, 05/28/2019 - 12:05pm

Another Way:
1000 automated traffic ticket machines (speed limit enforcement)
x 100 tickets per day on average
x 365 days per year
x 100 dollars per ticket
= $ 3.6 billion per year
More than enough to fix the roads without a tax increase, AND safer roads.

Ed Haynor
Tue, 05/28/2019 - 12:48pm

I attempted to complete the survey study referenced in this article, but since the survey questions didn’t appear to allow me to address a way to pay for increased revenue to fix Michigan roads, here’s the plan that I offer, which I believe is in the best interests of Michigan citizens.

First, claw back half of the $2 billion corporate tax break that was implemented by republicans early in Governor Snyder’s first term. This tax break was not a one-time tax break. It goes on each year into perpetuity. Corporations taking out $2 billion dollars of revenue yearly from the State of Michigan, in the form of a tax break, is quite obnoxious when you consider what Michigan needs to fix; roads, bridges and schools. Corporations would still have a yearly $1 billion tax break. This $1 billion dollars saved from a corporate tax break, would be completely dedicated to roads.

Second, take the $1 billion dollars gained from the state tax on fuel at the pump which is now dedicated to schools and dedicate this $1 billion to fix roads, bridges and overall infrastructure. By combining the $1 billion claw back of the current corporate tax break and the $1 billion dollars of sales tax revenue at the pump, this would give the state $2 billion dollars of additional revenue to fix our roads. With the $500,000 million gained from the full implementation republicans passed in 2015 to fix the roads, these three sources of revenue would get the state the $2.5 billion dollars of yearly revenue that experts say is needed to fix the roads.

Third, in order for the schools to be made whole with their loss of sales tax revenue at the pump and to further assist them in gaining needed revenue according to the study that was conducted by the School Finance Research Collaborative to finance schools in the future, change Michigan archaic static income tax rate of 4.25% to a graduated income tax, which the majority of states now have. Tax experts would be need to be consulted in order to compute the necessary graduated rate would have look like in order to replace the lost revenue at the pump and raise an additional amount of revenue schools need to have in order to raise student educational outcomes, so students can better complete in the future. But I would think that a graduated income tax rate between 3-9% would not be outlandish. Those at lower incomes would pay the lower rate and those at higher incomes would pay the higher rate. What could be fairer?

Now I understand that changing to a graduated income tax would require passing a ballot issue, since Michigan’s Constitution currently does not allow for a graduated income tax. But implementing all parts of my plan, or something very similar to it, would provide the necessary revenue to fix our infrastructure and schools and cause the least amount of financial harm, regarding the affordability of citizens paying for it.

In the end, I think the people are going to have to decide for themselves what’s the best course of action our state needs to take in fixing our roads and fixing the funding of our educational system, since I don’t believe there is any compromise going to come out of Lansing for either matter. As it was in 2018, when citizen initiatives were passed by Michigan voters to stop legislative gerrymandering and expanding voting rights, it’s going to take a 2020 ballot initiative(s) to fix both our roads and schools.

Elsie Owings
Sun, 06/02/2019 - 4:59am

Ed Haynor, your solutions come closer to my own ideas than anything I've heard from our governmental officials. I live in a rural area, which means that mass transit is not available, so automobiles are our only means of transportation to work or grocery stores. Yes, it also means we use the roads, so I have no objection to paying a portion of the cost of maintaining them. But I agree with those who object to Gov. Whitmer's proposal based on the fact that a gas tax is regressive: it hits the low income people harder than those with higher incomes. A person driving ten miles to work will pay the same gas tax whether he is driving to a job as a janitor or a job as a CEO.
I, too, am tired of designated funds being redirected to areas that were not originally part of the designation. And, like most Michiganders, I'm very tired of hearing that we can't ever have a graduated income tax because Michigan's constitution forbids it. Just who determined that a graduated income tax could never be implemented in Michigan? Influential rich people, undoubtedly. But the rank-and-file are ready to take back control of our government. The free ride for the wealthy needs to end, and forcing low-income people to pay more to get to work is just one more incentive to make that happen.

Mark Farris
Tue, 05/28/2019 - 2:45pm

The public forums held on road repair didn't have anything to do with gaining public input. We were invited to obediently accept one of many ideas dreamed up by the people who don't have realistic solutions.
$2.5 billion for the roads? Great, and what about all those bridges that connect the roads? Where will that $2.5 billion come from? Maybe we should have been offered two choices at those forums. Sure, how about toll roads and 45 cents a gallon gas tax? Then a boost in sales taxes for schools and pay raises for all govt. officials to further prop up the grand illusion?
Or, how about dismantling the auto insurance catastrophic fund? Or do too many people have their hands in that cookie jar? Bridge, how about some info on the catastrophic fund now that the scandal of auto insurance is nearing major change a year from now?

Keith
Tue, 05/28/2019 - 2:55pm

Road funding should come from every working Michigan citizen and visitor not just Car owners who drive and Truckers . Businesses require the use of Trucking for delivery of goods . When business moved their shipping preference from trains to Trucking they created the large heavy Trucking traffic on the nation’s and Michigan’s roads . Businesses need to have faster on time shipping and reduction in warehousing created the massive amount of heavyTrucking . Let them foot more of the road funding considering they use the roads for profit making . Business seems to think the roads are their’s so let them carry a larger share of the funding . Gasoline and diesel taxes are not a stable revenue source . Road funding needs to be permanent and untouchable for any other use .

Keith
Tue, 05/28/2019 - 2:55pm

Road funding should come from every working Michigan citizen and visitor not just Car owners who drive and Truckers . Businesses require the use of Trucking for delivery of goods . When business moved their shipping preference from trains to Trucking they created the large heavy Trucking traffic on the nation’s and Michigan’s roads . Businesses need to have faster on time shipping and reduction in warehousing created the massive amount of heavyTrucking . Let them foot more of the road funding considering they use the roads for profit making . Business seems to think the roads are their’s so let them carry a larger share of the funding . Gasoline and diesel taxes are not a stable revenue source . Road funding needs to be permanent and untouchable for any other use .

Mcdonatl
Wed, 05/29/2019 - 10:42am

No one is saying the obvious. We understand that it cost money to fix roads. Most I have talked to think we have been paying and the government has been squandering it (or some/much of it). What we want is for the government to "get back" the money we have already paid that has been diverted to other things. (and a little bit of punishment of the those involved in this type of dishonest money moving couldn't hurt) then we want a promise that all of the new money will get used for roads. After that, we would be willing to discuss how much money is really needed.

Most don't want to fund government waste or dishonesty with any new roads money.