Whitmer urges business to back gas tax, Michigan Republicans still balking

Gov. Gretchen Whitmer signed a bill that would change Michigan’s no-fault auto system Thursday — a major Republican legislative priority. She quickly turned to urging leaders to consider her roads funding proposal. (Bridge photo by Riley Beggin)

July 15: Republican ideas to fund Michigan road repairs taking shape over summer

MACKINAC ISLAND — Gov. Gretchen Whitmer stood before a sea of sport coats and seersucker Thursday afternoon, pleading with Michigan’s most influential business leaders to lean on the Legislature to pass a whopping 45-cent gas tax increase for roads.  

Hike the gas tax to generate more than $2 billion in revenue, she said, and fixes to many of Michigan’s other problems — underperforming schools, a skilled worker shortage and, of course, crumbling roads and bridges — will fall into place.

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

“I’m asking that you jump in … Seek out a legislator. No matter what side of the aisle they’re on, have the conversation,” she said. “Tell them what failing infrastructure means to you and your business. ... That’s my challenge to you today. Be a part of getting this done.”

The request came during the annual Mackinac Policy Conference on Mackinac Island, a meeting of business leaders and politicians and a place where deals can be made.

Earlier in the day, Whitmer signed into law a major overhaul of the state’s no-fault auto insurance system: a bipartisan deal years in the making and the top priority of  Republican leaders who control the Legislature.

During the celebratory signing, most of the leaders gave a nod to how the negotiation process they’ve practiced in the auto insurance deal is a premonition for how roads funding will shake out.

Related: What the no-fault auto reform deal means for Michigan drivers

But Republican leaders (Senate Majority Leader Mike Shirkey and Speaker of the House Lee Chatfield) said months ago that the 45-cent gas tax hike proposed by the Democratic governor is out of the question — a point they reiterated at a panel discussion later Thursday.

Asked whether Republicans could muster the votes to pass a 45-cent gas tax increase, Shirkey said simply: “Nope.”

Republicans have suggested instead finding places to cut within the state budget to fund roads repairs, though they haven’t yet introduced an official long-term proposal. Nor have they said how money diverted to Michigan’s worst-in-the-nation roads would impact other areas of the budget, such as education.

Shirkey said Thursday, as he’s said before, that a road funding plan will be part of “a very deliberate, focused process” and that his goal is to come up with a long-term solution that gives future legislators guideposts on the same issue.

“The best we can give to this state on this topic is the ability to see forward five, even 10 years,” he said.

Republicans have said a 2015 gas tax increase has yet to be fully realized, and Senate Republicans included in their proposed roads budget last month $132 million to be phased in a year earlier than scheduled — though the 2015 funding is not enough to fully address needed repairs, according to a report commissioned under former Gov. Rick Snyder and corroborated by independent studies.

Chatfield, however, doesn’t buy the $2.5 billion figure, saying the estimate for what’s needed has changed since he came into office. (Originally, the Michigan Department of Transportation estimated only $1.2 billion was needed to fix the state-owned roads. The 2015 funding package instead applied that figure to fix the whole system, not just state-owned roads.)

Besides, he said, “I don’t want to have a conversation about new revenue until every penny that’s paid at the pump is going towards roads,” he said. He’s referring to the sales tax, which is charged on gas but largely goes to K-12 schools instead of roads.

The Republican-led House has not yet released a budget for the state Department of Transportation or a separate roads proposal.

Whitmer’s plea to business leaders is not falling on deaf ears: Those at the helm of Michigan’s largest business advocacy organizations are urging leaders to come up with a roads funding plan.

The Michigan Chamber of Commerce called out Republicans earlier this week for banking on finding efficiencies that aren’t there. Those who are hoping for a magic solution are the “unicorn caucus,” Chamber President Rich Studley said Tuesday.

Improved roads will help facilitate commerce across the state, said Doug Rothwell, CEO of Business Leaders for Michigan. Plus, he said, dedicated funding for roads will avoid money being siphoned off from investment in education and skilled trades training, which feeds growing businesses.

“It’s hard to get people to want to invest in (Michigan) if we don’t look like we want to invest in ourselves,” he said.

Bridge reporter Lindsay VanHulle contributed to this report.

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Comments

Aaron
Fri, 05/31/2019 - 8:52am

Spend the money for roads quite giving out all these grants, grants are our tax dollars being giving and no pay back required we don't need any more taxes

Kathi Geukes
Fri, 05/31/2019 - 9:36am

Typical of the Repubs to say no....unless it's their idea, they want nothing to do with it!! I don't mind paying more if the roads get fixed and we help the public schools...DeVos's plan to turn MI into a charter school state is failing...as most of us thinking people knew it would....we need to put money into the public schools to fix buildings, buy text books, and help lower income neighborhoods...but I suppose the Repubs would love it if lower income neighborhoods stayed that way!! They don't like educated minorities!!!!

Matt
Fri, 05/31/2019 - 3:23pm

Kathi, you only scored a 3 on Lefty Bingo, not enough to win with some of the other stars out there yet to play. In addition to "Repubs "or Republicans, you got Charters and DeVos, again only a 3. I'd suggest next time including Koch, vouchures, Mackinac Inst, or ALEC for an easy win. Good Luck.

don
Fri, 06/07/2019 - 4:51pm

Kathi do not mind Matt just block him He is one of them brain damaged fox news watchers!!!So sad so brain damaged!!!

Jim Pearson
Fri, 05/31/2019 - 9:49am

Event Gas price Increased to Percent increase
1973 gas crisis $.28 $.56 100%
1979 gas crisis $.56 $1.35 140%
If the same thing happened today:
2019 $3.00 $6.00 100%
2025 $6.00 $8.40 140%
Governor's proposal:
2019-20 $3.00 $3.45 15%

The 1970's gas price increases were no fun. Yet, we drove less, consolidated trips, went the speed limit, and shifted to vehicles that got more miles per gallon. We adapted.
The governor's gas tax proposal is extraordinarily modest by comparison. Together we can do this to fix our embarrassing and dangerous roads.

don
Fri, 06/07/2019 - 4:55pm

First We need to have an investigation for the past 20 years were did all the money go? and HOW come our roads do not last event one year??? I have work for road contractors,,, lot of people on the pay rolls that only have SS numbers and no bodies. More crooks in MIDOT then in Rumps white house!!!

Anna
Fri, 05/31/2019 - 10:19am

My first problem with Gov. Whitmer's proposal is that only about 35 cents of the additional 45 cents / gallon is for "transportation". Even that fraction is not just going just to "fix the damn roads", or even to road and bridge repair, but will also be used on bike paths / lanes, studies for light rail boondoggles like the Q Line, and buses. Not to mention paying for the state's share of matching funds from the Feds for road building and adding lanes.

My second problem with the proposal is that the remaining 10 cents/ gallon will be used for exactly the sort of "funding shell game" that Gov. Whitmer has complained about and threatened to veto if the Legislature continues to use the tactic. That money goes to the School Aid Fund, replacing some General Fund dollars that have been allocated to supporting Community Colleges across Michigan as part of former-Gov. Jennifer Granholm's K-20 initiative for education. Supposedly both this extra tax money and the General Fund money being replaced will allow the state to fund K-12 schools more "equitably" across the state and improve career and technical education at Michigan's community colleges. The plans made public for funding equity have not yet explained what happens to the per-pupil funding for charter schools and Schools of Choice, both of which are now set at the state minimum per-pupil funding level by law. Because many, even most, charter school students come from low income families, "equitable" funding means giving a larger proportion of this new money to the charter schools. Schools which Gov. Whitmer has stated she wants to "rein in", if not eliminate.

My third problem with Governor Whitmer's proposed tax hike is that it is too large and too fast a blow to citizen's budgets, especially the budgets of rural and suburban residents who have no short run alternative transportation options to get to jobs, shopping, education and entertainment. Her original timing, calling for the first 30 cents of tax increases during the heart of Michigan's summer tourist season, is and was a terrible idea. We really don't need to handicap our state's second largest industry that way. Especially if the entire 45 cents / gallon is passed, there should be an offsetting cancelation of the 6% state sales tax on gasoline as part of this gas tax hike. If the spilt envisioned by the Governor between roads and schools is kept, it is still an overall increase for education without the 5-6 cents/gallon now allocated to schools from that sales tax.

A fourth problem, related to the reasons why the gas tax and auto-related fee hike passed by Gov. Snyder in 2015 is j finally available to assign to specific road repair projects in this construction season, is the limited capacity of Michigan's DOT to do the research, requirement setting, design oversight, and on-site inspection work needed to spend this money responsibly. MDOT is already short on engineering staff, and traffic engineers require a couple years after graduation to get good at their jobs. Michigan's civil service has good benefits, but only mediocre pay for STEM jobs of all sorts. How are we going to attract enough skilled and experienced people to spend $2 billion / year responsibly? Where will they come from?

My fifth objection is to Gov. Whitmer's tactics. She has threatened to veto any state budget that doesn't give her the whole $2 billion per year for roads and another $500-750 million/year for schools, including the as-yet-untried "equitable" funding model https://www.edchoice.org/blog/new-report-envisions-practical-solutions-t... From what I can gather, that model will replace the state portion (90+%) of targeted "title" grants with extra per-pupil funds for students with special needs and from families living in poverty. Since the model is untried, we have no information from the US Department of Education about how this change to school funding will be judged under "maintenance of effort" regulations. But my experience as a special education parent and advocate is that "general funds are controlled by general ed", and good luck getting something a little different to accommodate a special education student who is "fully included" or anything like an adequate amount of remediation or support from a resource room staff member.

Kevin Grand
Fri, 05/31/2019 - 11:33am

This should've been posted as an op-ed piece rather than a comment.

It touches on many issues Gov. Whitmer has been reticent to address with her gas tax.

middle of the mit
Sat, 06/01/2019 - 12:33am

"My first problem with Gov. Whitmer's proposal is that only about 35 cents of the additional 45 cents / gallon is for "transportation". Even that fraction is not just going just to "fix the damn roads", or even to road and bridge repair, but will also be used on bike paths / lanes, studies for light rail boondoggles like the Q Line, and buses. Not to mention paying for the state's share of matching funds from the Feds for road building and adding lanes."

No, your problem is that you are conflating sales tax with gas tax. https://www.micountyroads.org/PDF/CrummyRoads.pdf

"My second problem with the proposal is that the remaining 10 cents/ gallon will be used for exactly the sort of "funding shell game" that Gov. Whitmer has complained about and threatened to veto if the Legislature continues to use the tactic. That money goes to the School Aid Fund, replacing some General Fund dollars that have been allocated to supporting Community Colleges across Michigan as part of former-Gov. Jennifer Granholm's K-20 initiative for education. Supposedly both this extra tax money and the General Fund money being replaced will allow the state to fund K-12 schools more "equitably" across the state and improve career and technical education at Michigan's community colleges. The plans made public for funding equity have not yet explained what happens to the per-pupil funding for charter schools and Schools of Choice, both of which are now set at the state minimum per-pupil funding level by law. Because many, even most, charter school students come from low income families, "equitable" funding means giving a larger proportion of this new money to the charter schools. Schools which Gov. Whitmer has stated she wants to "rein in", if not eliminate."

This is the part of the SALES TAX ON GASOLINE that you conservatives conflate with a gas tax. You want the sales tax on gasoline to go to the roads yet you have no plan to replace that general fund revenue with anything else, do you?

"My third problem with Governor Whitmer's proposed tax hike is that it is too large and too fast a blow to citizen's budgets, especially the budgets of rural and suburban residents who have no short run alternative transportation options to get to jobs, shopping, education and entertainment. Her original timing, calling for the first 30 cents of tax increases during the heart of Michigan's summer tourist season, is and was a terrible idea. We really don't need to handicap our state's second largest industry that way. Especially if the entire 45 cents / gallon is passed, there should be an offsetting cancelation of the 6% state sales tax on gasoline as part of this gas tax hike. If the spilt envisioned by the Governor between roads and schools is kept, it is still an overall increase for education without the 5-6 cents/gallon now allocated to schools from that sales tax. "

And now you want the sales tax to offset the gas tax? How do conservatives pay for anything?

The wealthy shouldn't pay because they will pass it on to us. So that leaves us to pay! Get used to it! That is the way you want it.

Todd
Fri, 05/31/2019 - 1:54pm

Your bias is showing again as usual. The democrats are balking as well.

Res ipsa loquitur
Mon, 06/03/2019 - 2:55am

I have little to no confidence that this gas tax increase will translate to quality road construction and repairs in Michigan. Billions are already being spent on the roads that fall apart (built in obsolescence) a few years later. Frankly, Whitmer made many people nervous on the campaign trail. Now that she is governor her half baked auto insurance plan, as well as what appears an ill conceived proposal to fix the roads seem to justify those fears.

don
Fri, 06/07/2019 - 4:59pm

You are right I-696 re built last year fall all read had to be repairer this spring!! Snyder last road kick back project!!

WeTodd
Thu, 08/29/2019 - 1:14am

I'm not saying you're right or wrong. I'm saying that you seem quick to judge.

don
Fri, 06/07/2019 - 4:49pm

How come states that have not had Crooks like Engler, GrandMold and Snyder as governors who received KICK BACK from Carlo and other Have Better roads and less gas taxes?
AND how COME ROAD BU LIT BEFORE THIS CROOKS LIKE the Davison and I-75 last for over 50 years were the newly built I-696 (last Fall) already had to have repairs??? Get the kick back from these former governors and other FIRST then we can VOTE according to the MI consutition on new taxes!

spinnakerninja
Fri, 06/14/2019 - 7:01am

BUSINESSES will be able to DEDUCT the GAS TAX. Trucks, especially semis, undeniably cause the MOST DAMAGE to the roads. Thanks to tax reform, any of us who are not a company or self employed can no longer deduct any job related expenses including fuel. I keep waiting for anyone to write about this, but as of yet I have not seen anything.