Gov. Gretchen Whitmer’s plan to increase taxes to fix the damn roads is falling flat with the business leaders she hoping to squeeze for $1.6 billion.

“This increase penalizes the entire economy and creates a new challenge for doing business in Michigan,” Detroit Regional Chamber officials told MLive. “While the Detroit Regional Chamber thanks Whitmer and Speaker (Matt) Hall for seeking a long-term solution for road funding, that conversation needs to focus on user fees instead of giving more reasons to do business elsewhere.”

On Monday, Whitmer unveiled a plan to increase road funding by about $2.75 billion a year that can be summarized in two words: more taxes.

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The plan includes an unspecified increase in the corporate income tax, $470 million in new taxes on wholesale marijuana, and tax increases on heavy trucks, among other components.

The governor’s office will not divulge how much Whitmer wants to increase the state’s 6% corporate income tax to generate the $1.6 billion she’s hoping to realize, but the Detroit Regional Chamber suggests the rate would need to hit 8% to generate that revenue, putting the state among the highest in the nation.

“Our roads throughout Michigan are falling apart and people are paying the price,” said Rep. Jerry Neyer, R-Shepherd, in a statement. “Local road commissioners are doing whatever they can, but the truth is the state has done a terrible job getting funding to where it’s needed most. The House Republican plan would secure substantive funding for local roads without forcing tax increases on the public – it would take the governor giving up on some failing corporate welfare programs. Instead, Gov. Whitmer is trying to go it alone and protect her handouts by forcing the public to foot the bill for her own poor planning.”

Data from the Tax Foundation, the world’s leading nonpartisan tax policy nonprofit, suggests an 8% corporate tax rate would make Michigan the 14^th most expensive state to do business.

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While Whitmer argues her plan “will ask massive corporations and Big Tech industries, such as Amazon, X (formally known as Twitter), Facebook, and TikTok, led by the nation’s wealthiest individuals, to pay their fair share to do business in Michigan and use Michigan roadways,” the Detroit Chamber shared a different perspective.

The governor’s tax increase on C-corporations, 87% of which employ fewer than 100, means about half of the state’s population that’s employed by them will be “subject to budget cuts, decreased wages and reduced spending power,” according to the Detroit Chamber.

Whitmer’s road plan comes as taxpayers are spending $340 million this year to pay off $3.5 billion the governor borrowed for road repairs after lawmakers rejected her first funding plan to hike the state’s motor fuels tax.

Whitmer’s decision to borrow $3.5 billion cost taxpayers $2.5 billion in interest, according to Michigan Department of Transportation data cited by The Detroit News.

That money is now gone, and the state faces a $3.9 billion annual road funding shortfall the governor described last month as a “major funding cliff.”

“Make no mistake, infrastructure improvement is a critical priority for the state, and one the Chamber and MichAuto continues to champion,” Detroit Regional Chamber officials said. “However, if there are serious intentions to find sustainable solutions for road funding, the conversation needs to center on existing revenue sources for roads and spending cuts that can compensate for the budget shortfall.”

The Michigan Chamber of Commerce echoed that sentiment, pointing to the major negative impact Whitmer’s proposed tax hike could have on the Michigan’s ability to attract and maintain businesses.

“We want to make sure a tax is necessary,” Chamber President Jim Holcomb told MLive. “We think there has to be more money in roads, absolutely, but we want to make sure that we’re using current resources. When you have over an $80 billion budget, we just want to make sure that the current resources are being properly allocated and then have a conversation of how best to move forward.”

Whitmer’s road funding plan, which also included $250 million for public transit, swells the governor’s proposed spending plans for next fiscal year to a record $86 billion – a 43% increase that amounts to about $30 billion more than when she took office.

“The governor’s claim that Michigan doesn’t have enough existing revenue to fix our roads is simply false. Just last month, the House introduced a responsible, $3.1 billion plan that prioritizes road repairs using existing revenue, without raising taxes,” state Rep. Ann Bollin, chair of the House Appropriations Committee, said in a statement.

“The problem isn’t revenue, it’s priorities,” Bollin said. “The money is there. We don’t need higher taxes to fix our roads. We need leadership that respects taxpayers, spends responsibly, and makes roads a priority.”

Republicans unveiled their own plan to pump $3.1 billion into road repairs without raising taxes during last year’s lame duck session, but a Democratic majority blocked lawmakers from discussing it.

The legislation from new Republican House Speaker Matt Hall, R-Richland Twp., would permanently dedicate $2.2 billion from the Corporate Income Tax to roads by stripping out $500 million each in legislative earmarks and Michigan Economic Growth Authority tax credits. Another $600 million would come from higher than expected tax returns outlined by the state’s revenue estimating conference, while about the same amount would be saved by reworking deposits into the state’s corporate attraction, placemaking, and development funds.

Other funding for Hall’s roads plan would come from permanently dedicating all motor fuels taxes to roads, which would provide $945 million.

“Government spending has grown 43% since Gov. Whitmer took office, and our local roads still have not been fixed. That’s why our approach focuses on our long-neglected local roads that people drive from their driveway to the highway and finally gives us a clear plan to fix them,” Hall said. “Michigan families expect results – that’s why our plan focuses on real solutions, including prioritizing funding roads over funding corporate earmarks, making the most out of our current budget instead of raising new taxes, and fixing local roads first.”

Whitmer’s road funding plan also faces opposition from Senate Republicans, who panned the proposal as simply the latest “of Gov. Whitmer’s failed tax-and-spend ideas.”

“For six years, Gov. Whitmer has failed to introduce a real plan to fix Michigan’s roads other than a 45-cent gas tax increase and her unilateral maneuvering to rack up $3.5 billion on the state’s credit card because she refused to work with the Legislature,” Senate Minority Leader Aric Nesbitt, a Porter Township Republican running for governor, said in a statement.

“She’s already floated the idea of new taxes on Michigan drivers based on the miles they travel. Now, she wants to reach deeper into the coffers of Michigan businesses to impose unspecified fees and taxes that will surely trickle back down to consumers,” he said. “The bottom line is she has no real plan because she refuses to cut back on wasteful government spending.”