Michigan’s ballot-initiative road funding plan, otherwise known as “Proposal 1”, has been defeated in the polls by a wide margin – nearly 80% opposed versus 20% supportive.
The intent of Proposal 1 was to raise the state sales tax from six percent to seven percent but exempt fuel, and re-structure the way fuel is taxed in the state of Michigan. It would have moved Michigan from the current cent-per-gallon model and implement a 14.7 percent fee on wholesale price.
Approval would also have triggered 10 other laws designed to boost road funding through higher fuel taxes and modified registration fees, maximize the new investment with construction warranties and provide earned income tax credits for low-income residents.
The package was projected to generate $1.25 billion a year for roads once fully implemented, along with a combined $600 million a year for schools, cities, mass transit and the state’s general fund.
The Michigan legislature will now be required to go back to work on other proposals if they wish to come up with a solution for Michigan’s transportation funding structural deficit.