Michigan Legislature approves $400 million for roads

September 25, 2019

Keith Goble

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A deal has been reached at the Michigan statehouse to provide a shot in the arm for the state’s roads and bridges. The deal is a far cry from the nearly 50-cent fuel tax increase that Gov. Gretchen Whitmer wanted the Legislature to approve.

A conference committee made up of select House and Senate lawmakers in the Republican-led legislature approved additional road revenue without a tax or fee increase. Legislators voted along party lines to route $400 million from the state’s general fund to transportation.

The money would be in addition to $450 million from the general fund that a 2015 Michigan law requires to be shifted to the transportation account.

Senate Majority Leader Mike Shirkey, R-Clarklake, said the road funding deal fulfills a promise to Michigan taxpayers.

“We are building upon the promise we made to taxpayers to find money within our existing budget to fund one of our major priorities: roads,” Shirkey said.

The governor says the transportation spending deal is inadequate.

“This backwards plan to cut funding from our departments to pay for roads is exactly how we got in this mess in the first place, and it won’t do a damn thing to actually solve the problem,” Whitmer said in prepared remarks.

The deadline for the Legislature to approve budgets, including transportation, for the upcoming fiscal year is Oct. 1. The bill, SB149, now moves to the governor’s desk.

A long road

Early this year, the Democratic governor called on state lawmakers to come up with a long-term transportation funding plan.

The state now collects a 26.3-cent tax on fuel purchases. Revenue is divvied between the state DOT (39 %), county roads (39 %), and cities (22 %). The state also charges a 6% sales tax on fuel purchases.

Whitmer champions a 45-cent to increase the state’s fuel tax rate. Her planned increase would come in three 15-cent installments every six months. When fully implemented, the state’s tax rate would become the nation’s largest at 71.3 cents.

Nearly three-quarters of the anticipated $1.5 billion in new revenue would be applied to state roads. The remaining amount would go to local roads.

Michigan last raised the fuel tax rate in 2015 by 7.3 cents.

Republicans at the statehouse said the governor’s plan is “a nonstarter,” and that instead they want to tap into existing revenues to help eat into the state’s road and bridge funding needs.

Whitmer had said she would veto any budget plan that does not include a long-term transportation funding plan.

As the months went along and the deadline for approving a fiscal year 2020 state budget approached, the governor opted to relent in favor of getting something done.

The governor and legislative leaders reached agreement to set aside discussion of a long-term transportation funding plan until after the state’s budget is completed.

Failure to get a deal done in time could result in at least a partial Michigan government shutdown. Among the affected budgets would be state-funded road work, as well as nearly 80 rest areas and welcome centers.

Programs labeled as “critical functions” of government would remain open, such as the Mackinac an International bridges.

Long-term option to be pursued

The governor has not backed off from her pursuit of a deal to nearly triple the state’s fuel tax rate. The revenue would be routed into a new fund devoted to maintain and reconstruct the state’s most heavily traveled roadways.

Nearly three-quarters of the anticipated $1.5 billion in new revenue from the proposed fuel tax increase would be applied to state roads. The remaining amount would go to local roads.

Leaders in the Republican-led statehouse oppose the proposed fuel tax increase for being excessive.

The governor has challenged critics of her plan to come up with a better idea.

“It’s time for Republicans to stop playing games and put a real road funding solution on the table that keeps drivers safe, ensures our roads get fixed with the right materials and mix, and makes road repairs now so costs don’t keep going up over the long run.”

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Keith Goble

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.