How we make the call
Truth Squad assigns five ratings to the political statements we review, in descending levels of accuracy:
|Who:||The Coalition Against Higher Taxes and Special Interest Deals|
|What:||“Checkout,” “Ssshhh!” 30-second ads|
A woman checks out at a store, and gets more than she plucked off the shelf: A sleazy, suit-clad “special interest” man who lounges in her cart, running up her bill and just being a pain in her neck. Proposal 1, the implication is, ensures that everyone will end up paying taxes that go to special interests.
In another, similar ad, the same special-interest man sits at a big desk, cigar in his fingers, counting $100 bills into piles like Scrooge McDuck. A whispered voice-over makes the same claims as in the first ad, so we’ll take the text for one to serve for both.
Relevant text of the ad
"(Proposal 1) gives Michigan one of the highest sales taxes in the nation. Lansing politicians say the tax is for roads… but nearly forty percent goes to special interests."
Statements under review
Proposal 1 gives Michigan one of the highest sales taxes in the nation.
True but misleading. Should Proposal 1 pass, the sales tax would rise from 6 to 7 percent, joining five other states at that level, second-highest in the country. (California sits at the top, at 7.25 percent.) But that’s not the whole story, as a glance at that link reveals. Michigan is one of 14 states that have no local sales taxes piggy-backing onto the state rate. When local taxes are taken into account, a 7 percent sales tax would have it clustered around 20th in the nation.
Lansing politicians say the tax is for roads… but nearly 40 percent goes to special interests.
Proposal 1 is one complex piece of legislation, comprised of a constitutional amendment (what voters will be asked to approve), connected to 10 different bills, which only go into effect if the proposal passes. It’s complex because it aims to pull a tablecloth off the budget table without breaking any dishes. In its extreme shorthand version, Proposal 1 is called a solution for roads, but even its supporters’ 30-second ads have said it’s for fixing the roads while also protecting funding for schools and local governments.
Equally problematic is the ad’s claim that a good portion of the money is going to special interests, a reference to funding for schools and local governments.
Here’s the deal: Every time we fuel our vehicles, Michigan charges us 19 cents per gallon and 6 percent sales tax. The former is used for transportation funding, the latter goes into the general fund, where it does what general-fund dollars do – funds government functions, mainly education and revenue sharing to local governments. Taxpayers have expressed frustration that we pay fairly high gas taxes for such awful pavement, and Proposal 1 is supposed to fix that, making sure all state tax money collected at the pump goes to roads.
But taking fuels out of the sales-tax base would blow a sizable hole in the state’s School Aid Fund, something Proposal 1 seeks to avoid by raising the tax by a penny per dollar, or 17 percent.
Are education and local governments special interests? The term generally refers to groups that try to influence government on behalf of industries, businesses or causes. Under that definition, the label is difficult to justify. Most folks, whatever their politics, would probably agree that public education goes to the very core of what we expect from government, and local revenue sharing, besides supporting police, fire and other functions, isn’t just a Christmas gift for municipalities, it’s what’s due them from sales tax collections and is enshrined in the state constitution.
Proposal 1 is a big fat piñata for its opponents to swing at – the tax increase; the fact it not only makes schools and local governments whole from losing sales tax revenue on fuel, but actually increases their share; or just the fact the proposal has so many moving parts. It’s confusing to voters. But this ad misleads, mischaracterizes and, on the allegation regarding special interests, is just plain wrong. Foul.