Michigan Senate panel rejects Whitmer gas tax, as budget dance continues

Senate Republicans intend to divert $600 million in state income tax revenue to road repairs in 2020, a year earlier than planned. But the early proposal adopted by a Senate budget subcommittee Tuesday does not include Gov. Gretchen Whitmer’s proposed 45-cent, per-gallon gas tax hike, nor any other long-term funding increase for roads. Senate leaders have said they will work on a separate road-funding proposal by this summer.

A Michigan Senate panel Tuesday excised Gov. Gretchen Whitmer’s proposal to raise the gas tax by 45 cents to pay for road repairs, hardening the divide over road funding between a Democratic governor and a Legislature controlled by Republicans.

Senate Republicans said they instead intend to divert $600 million in state income tax revenue to road repairs in 2020, a year earlier than planned. That funding, earmarked in 2015 as part of a $1.2 billion road-funding legislative package, will be sped up with the use of $132 million in one-time money, according to a Senate transportation budget adopted on a party-line vote.

May 31, 2019: See how much a 45-cent Michigan gas tax might cost you

As expected, the seven-member Senate transportation budget subcommittee did not include Gov. Gretchen Whitmer’s proposal to raise $2.5 billion by hiking the state’s gas tax, currently at 26.3 cents per gallon, by another 45 cents over a year.

Republicans, led by Senate Majority Leader Mike Shirkey, R-Clarklake, have said they will develop a longer-term road-funding proposal this summer that will be considered separately from the budget for the 2020 fiscal year, which starts Oct. 1. That’s an idea Whitmer already said she opposes.

In a statement Tuesday, Whitmer’s office said the governor will veto the Senate’s roads budget if lawmakers send it to her as written.

“The governor stands ready to work with the Legislature but the Senate budget passed today won’t do anything to actually fix the roads, and could actually make things worse,” Whitmer spokeswoman Tiffany Brown said. “If this plan reaches her desk, the governor will veto it.”

In the short term, that means the Senate’s 2020 roads budget as adopted Tuesday does not include any new funding tool for roads, whether from a gas tax, a registration fee increase, or any other source.

“It’s money that we have in the budget. We know that it’s revenues that we’re getting,” said Sen. Wayne Schmidt, R-Traverse City, chairman of the Senate’s transportation budget subcommittee, of the 2020 budget adopted Tuesday.

The political dance over building Michigan’s next budget will continue throughout the week, as Republican-majority Senate budget committees begin to approve spending plans for a number of state departments. Whitmer’s gas-tax proposal was but the first step. Once the House and Senate each put forth their budget plans, the final details are negotiated between the governor’s office and Legislature, with no resolution expected anytime soon.

All five Republican subcommittee members voted Tuesday to pass the party’s roads budget for next year; both Democratic senators on the panel opposed it.

On top of $325 million in diverted income taxes that was scheduled to phase in next year as part of the 2015 roads package, the Senate transportation budget would dedicate another $132 million from the state’s general fund to county and city road agencies. It also would restore an earmark of $143 million from anticipated online sales tax collections, the result of a recent U.S. Supreme Court decision, to roads. Whitmer instead has said the state should use that money for public schools, budget spokesman Kurt Weiss said.

Of Whitmer’s gas-tax proposal, Schmidt said: “It’s money that we don’t know that we’ll have. No matter what your thought is on a gas tax — whether you want it higher, lower, whatever it is — that’s the future. We know what we have today.”

Whitmer is at odds with Republicans who control the state House and Senate over road funding.

The first-term governor, who rode into office on a campaign slogan to “fix the damn roads,” says legislators have the opportunity to cast a single vote and solve some of Michigan’s most pressing problems — repairing crumbling roads and improving struggling K-12 public schools.

Multiple expert analyses have pegged Michigan’s road-funding need at more than $2 billion, on top of the $1.2 billion lawmakers passed in 2015. The Michigan Department of Transportation has said the $1.2 billion needed four years ago was strictly for the state-owned network of freeways and highways, but that amount ultimately was divided among the state, counties and cities.

“If we don’t find long-term new revenue, there is no reason to think that the pavement is going to get any better in Michigan in the long term,” MDOT spokesman Jeff Cranson told Bridge after the Senate subcommittee passed its roads budget.

“We still like the governor’s plan,” Cranson added. “It gets the most pavement to the best condition in the shortest amount of time.”

Republican lawmakers have pushed back on the size of Whitmer’s proposed gas tax increase, as well as a related plan to give the bulk of the new $2.5 billion raised from higher gas taxes to MDOT and major local roads that carry the most traffic.

Schmidt, the subcommittee chairman, said he is exploring multiple options for long-term funding. He added that he would prefer to find a funding source for roads that could be dedicated and transparent, rather than one from which money could be diverted to pay for other priorities in the state’s $10.7 billion discretionary general fund.

“People want to know, when they buy something, where those tax dollars are going,” Schmidt said. “I think the clearer it is, the more dedicated it is, the more likely people will accept whatever the future road-funding plan might be.”

Either way, taxpayers need to see what Republicans intend to introduce as a longer-term alternative to Whitmer’s proposal to raise the $2.5 billion needed for road funding, said state Sen. Adam Hollier, D-Detroit, who voted against the Senate’s roads budget Tuesday.

Hollier said Whitmer’s road-funding proposal, which he supports, so far is the only option on the table that raises enough money to adequately fix the roads. Republicans, he added, have had months to put a long-term plan on the table and have not yet done so.

“We now have a budget that says that roads are no more important than they were last year,” he said. “Either they don’t have a solution, don’t have an alternative, or they’re not willing to discuss it.”

House Republicans, meanwhile, continue to make progress on a road-funding budget but have not committed to a deadline to release it, spokesman Gideon D’Assandro said. He declined to discuss details of what the House plan might include.

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Comments

John Sweda
Tue, 04/23/2019 - 5:33pm

The proposed 45 cent gas tax will go the way of Rick Snyder's 2015 proposed 7% sales tax. Nowhere. Rick Snyder donned a yellow vest and a hard hat and patched potholes, to promote Proposal 1, which was voted down by 80% of Michigan voters.

Don
Wed, 04/24/2019 - 4:29pm

And how many people would just go out of state on weekends to fill up?
And Look what happen to all the people that use to come to hunt and fish in MI until GrandMold tripede the fees! costing MI millions!!!

Agnostic at 2.0
Tue, 04/23/2019 - 6:07pm

I think Republicans like crappie roads.

Theist
Wed, 04/24/2019 - 10:45am

.....so, you are saying they like fishy roads? Before you insult, you may want to spell check.

Pat
Wed, 04/24/2019 - 2:41pm

LMAO!

Jerry
Wed, 04/24/2019 - 10:57am

Not so. Just don't like more of the same old, same old tax and divert the money for other pet uses. Doesn't matter what party is in control either.

Don
Wed, 04/24/2019 - 4:34pm

To many no bid contracts going to the governors buddies like Carlo.....
And WHY is I696 east of I75 all ready forming pot holes>>> When I-75 bult in the 1960's just now need rebuilding?
And the Diveson the first Express ever built in the USA lasted over 60 years re built less then 5 years ago need pot holes filled>>> Seems that roads built befor the fat A engler lasted 60 years, after him only a year of two???

Kevin Grand
Wed, 04/24/2019 - 8:37am

Yep, here comes another "Lost Decade"...

Jerry
Wed, 04/24/2019 - 11:00am

Most likely, Kevin. I've already started the process of selling my small business so I can restart in Texas. October 2019 will see another Granholm like government shutdown. May as well break out the "Welcome to Michigan. We hate business's" signs.

Don
Wed, 04/24/2019 - 4:37pm

LOL!! And how many corperation left MI under Snyder the Snake????
Not counting the people who could not aford Snyders taxes, and the sub standard schools thank to the republican taking money from the Public schools!!!

Bones
Wed, 04/24/2019 - 12:16pm

Citizens of Michigan: Our schools suck, our roads suck, our environment is being polluted, our jobs pay poorly, we're unhealthy and dying early. Something must be done.

GOP: Sounds like things are pretty terrible. How about we continue doing all the same things that caused these problems, while continuing to ignore and deny the systemic flaws at the root of those issues? Pay no attention to the business interests who control us like marionettes. Here's a $50 tax break and some racism to mollify and redirect your rage at the damage our inability to govern has caused

Jacob Toolen
Wed, 04/24/2019 - 10:47am

So they've known since November that they were going to have a Whitmer as governor but they won't have a road funding plan until this summer? What's taking so long? There should have been a counter proposal on the table the minute Whitmer finished proposing her gas tax.

Dave
Wed, 04/24/2019 - 11:00am

Politics before progress. Why do anything when you can blame the other guy?

Rick
Wed, 04/24/2019 - 11:00am

The Michigan GOP has had how many years to formulate a plan and now they still don't have one?! Must be like the national GOP replacement for Obamacare - 'vaporware'. Never to see the light of day.

The Michigan GOP doesn't legislate; they just procrastinate - forever. Only solution is to kick them out of office and bring in some adults who really want to fix our problems.

David
Wed, 04/24/2019 - 11:03am

MI roads continue to be a disgrace. Instead of a gas tax, drivers will be paying for new tires, suspensions, shock absorbers and alignments.

Jon
Wed, 04/24/2019 - 11:10am

Thank God for some sensible tho king on the part of the Republicans. Between Gretchen and Dana, I can not wait to log one more year in to get to retirement and get the hell out of this place

middle of the mit
Sun, 04/28/2019 - 8:12pm

What is a tho king?

Or did you mean thinking?

Just wondering? Are you retiring with a State pension, or just a pension from a Michigan employer?

And, why such animosity for the State?

Are you going to a southern state where they tax groceries and home essentials and no longer tax your pension?

Must make the poor pay for the State. Of course your pension wasn't taxed until Snyder and co. taxed them.

Now you want to blame dems.

When did King Richard become a role model?

Rick
Wed, 04/24/2019 - 11:31am

Fix the damn roads - not for this year, for the long term. I just spent nearly $500 on my car due to the potholes in our State. Quit the political antics/dancing and get the job done now, not "next summer"! What whimps we have in the legislature. We're already paying a dollar a gallon more since 2016, what's 45 cents more? What are you going to do, wait till we hit $4 a gallon?

James Roberts
Wed, 04/24/2019 - 1:39pm

Can't wait for 2020. Will be fun running against the gang that says "vote for me I will raise your gas tax by 45 cents. Gov. Gran.., oops I mean Whitmer better get used to having a legislature that doesn't have to pay back her special interest group friends.

Pat
Wed, 04/24/2019 - 2:39pm

Just last week Gov. Whitmer said, "if you have a better plan, let's see it" (referring to the gas tax hike). Now the Republican's came up with a plan that doesn't include the controversial gas tax & she said she would veto it. Typical Democrat. They can't do anything that doesn't include raising taxes.

Todd Priest
Wed, 04/24/2019 - 3:42pm

Good!! This woman is a for sure one and done-one termer. No doubt about that.

John Pilon
Thu, 04/25/2019 - 7:07am

Any road repair funding package will have to have bipartisan buy in. It seems Gretchen's 45 cent tax was just a start of the budgeting process. I don't think she expected it would get much traction, but it serves to put the ball into the republican's court.

Gary Lea
Sun, 04/28/2019 - 8:02am

This statement is distressing: "Senate Republicans said they instead intend to divert $600 million in state income tax revenue to road repairs in 2020, a year earlier than planned." A year earlier? Each year our road deterioration accelerates while repair costs escalate - when politicians serve one term, they won't need to 'play politics' to ensure reelection.