From MIRS: Long-Awaited Transportation Package Squeaks Through Senate

From MIRS, 11/13/2014, www.mirsnews.com

After months of indecision, the state Senate today pushed through a bill that would raise the gas tax to a new wholesale level of 15.5 percent by 2018 in the hopes of siphoning more than $1 billion in extra funding for roads.

An amended version of HB 5477 brought forward by Senate Majority Leader Randy RICHARDVILLE (R-Monroe) was passed in the second vote taken on the matter, 23-14, without floor debate. His version was initially defeated 18-15, with five Democrats not voting.

Under Richardville’s amendment, the bill would replace the current 19-cent-a-gallon gas tax with a wholesale gas tax of 9.5 percent starting April 1, 2015. It would continue increasing for the next three years: 11.5 percent in 2016, 13.5 percent in 2017 and 15.5 percent in 2018. According to one estimate, the comparable wholesale rate of the state’s current gas tax is around 7 perecent.

A Senate Fiscal Agency analysis of the plan suggests the bill could raise somewhere between $781 million and $1.5 billion in additional road funding. The exact amount would depend on the wholesale price of gas.

According to a document distributed to lawmakers earlier this week and obtained by MIRS, legislators have been looking at two options, one of which was the Richardville plan rolled out today.

The other option, labeled as “Plan 2,” involved upping the wholesale gas tax up to 13 percent by 2020, phasing out the sales tax on gas and adopting a 1 percent sales tax increase to replace revenue lost by schools and local governments. Plan 2 would bring roughly $1 billion for roads.

After the vote, Richardville told reporters one of the tipping points to get the Democratic votes he needed was the inclusion of language that will give the city of Detroit more flexibility to invest in mass transit.

In June, Senate Minority Leader Gretchen WHITMER (D-East Lansing) helped negotiate a $200 million restoration to the Homestead Property Tax Credit that’s currently awaiting House approval as part of the deal.

Ten of 12 Democratic caucus members voted yes in the final tally, with Sens. Glenn ANDERSON (D-Westland) and Hoon-Yung HOPGOOD (D-Taylor) opposing.

“It’s not the easy thing to do, but in terms of our infrastructure and the safety of the people of our state and business climate, we thought this was the right vote to cast,” Whitmer said. “We passed what we think is a real solid compromise that’s a long-term solution (that starts) immediately.”

Richardville said the bill’s success was a sign that transportation talks were actually headed somewhere.

“We wanted to take a big step today to show people we’re serious,” Richardville said. “If you’ve got an alternative, great. We’ll be looking for it.”

Gov. Rick SNYDER, who has made it clear getting a feasible road package through the Legislature was his top Lame Duck priority, said in a statement after the vote that the Senate’s action was a crucial step to fixing Michigan’s infrastructure. But he also acknowledged there was still more to accomplish.

“Michiganders want to see a sustainable, long-term approach to our transportation needs,” he said. “It’s essential for boosting our state’s economy, creating jobs, improving our quality of life and the safety of our residents and visitors. These steps are to make Michigan better and stronger.”

Although the majority of legislators were happy to see a compromise passed in the Senate, some groups weren’t impressed with today’s outcome.

In a statement, Americans for Prosperity-Michigan grassroots group director Scott HAGERSTROM said the hike would give Michigan drivers the highest gas tax in the nation.

“Rather than prioritize state spending, Senate leaders chose to break the family budget,” he said in the statement.

The transportation package will now move to the House, where conservative members were already voicing questions about the increase in the bill and Democrats were talking about what bills would have to be taken off the table for them to support it.

“We appreciate that the Senate responded and sent something back to us to review,” said Ari ADLER, spokesperson for House Speaker Jase BOLGER (R-Marshall). “But now we need to look at what they did to the bill that we sent over there, what it means for road funding and what it means for Michigan taxpayers.”

As part of the package, the Senate also passed HB 5453 37-0, which would incorporate stiffer fines for overweight trucks. A related bill that would reduce the amount that a maximum load could be was not taken up today.

Other road bills passed today include SB 0281, which would allocate revenue from three cents of the motor fuel tax to maintain and repair the state’s moveable bridges. That bill passed 30-6.

SB 0200, which would require the state to give preference to and solicit bids from county road commissions for maintenance work on state trunk lines, was passed 37-0.

One road funding initiative that was unsuccessful, however, was SJR A, a resolution first introduced by Sen. Howard WALKER (R-Traverse City) in 2013 that would put a 1 percent sales tax increase on the statewide ballot.

When the Senate first took it up, the resolution did not achieve the supermajority vote it needed, going down 14-24. It went down again with an 18-19 vote today, but Richardville did not rule out the idea of bringing it to a vote for a third time.

“I think the fact that we went from 14 votes from the first time we threw it up to 18 means that more people are opening up to at least a consideration of that,” he said.