Gov. Gretchen Whitmer continues to insist the state can’t fix its roads without increasing taxes, despite a plan approved in the House this week to do exactly that.
“I’m glad the speaker is finally solving the roads or at least having another long-term solution that has eluded us for decades,” Whitmer told WXYZ.
Yet despite her praise for the Republican plan spearheaded by Speaker Matt Hall, R-Richland Twp., Whitmer told the media she plans to work with Democrats who control the Senate to increase taxes to fund her 2018 campaign promise to “fix the damn roads,” the campaign promise she made when she first ran for her first term as governor in 2018.
“It’s not going to be all in cuts, and it’s not going to be all in new revenue, but all of these pieces are important to the final outcome that is going to be fixing the actual problem that we’re trying to solve,” she said.
The nine-bill package to pump $3.2 billion annually into the state’s crumbling roads cleared the House on Wednesday with support from all Republicans and seven Democrats, including former Democratic House Speaker Joe Tate, D-Detroit, Bridge Michigan reports.
The plan calls for shifting $2 billion in annual corporate tax revenues to roads, as well as $550 million in business incentives. Other funds would come from corporate tax credits, higher-than-anticipated tax revenues, and directing all revenues from the state’s motor fuels taxes to roads.
Whitmer has proposed a different $2.7 billion plan that would instead increase corporate sales taxes to squeeze Michigan businesses for $1.6 billion, and impose $470 million in new taxes on wholesale marijuana, among other new taxes.
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While the governor’s “MI Road Ahead” plan is light on specifics, legislation recently introduced by House Democrats aims to hike the corporate income tax rate from 6% to 8.5% to fund road repairs, which would put the state on par with California with one of the highest rates in the nation.
“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 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.”
“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,” Michigan Chamber of Commerce President Jim Holcomb told the news site.
Despite that resistance, Whitmer’s office this week took aim the Republican no-tax roads plan, alleging to Gongwer News Service it would lead to layoffs, a budget deficit, and cuts to local services.
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The House plan, Whitmer press secretary Stacey LaRouche told Bridge, “does not achieve” the kind of long-term solution the governor is looking for.
“The governor is open to suggestions from Republicans and Democrats, but inaction is not an option,” LaRouche said.
Whitmer demanded during her State of the State address last month that lawmakers work together with urgency to address the state’s $3.9 billion annual road funding shortfall, and insisted new taxes must be part of that effort.
The governor was elected six years ago on a promise to “fix the damn roads,” but was forced to borrow $3.5 billion when lawmakers rejected her plan to hike the state’s motor fuels tax by 45 cents to the highest rate in the nation.
That money is now gone, and “roads are deteriorating faster than the agencies can repair them,” according to an annual road and bridges report.
Michigan taxpayers are spending $340 million this year to pay off the $3.5 billion the governor borrowed for road repairs, which came with $2.5 billion in interest, according to Michigan Department of Transportation data cited by The Detroit News.
Despite Whitmer’s call for compromise and bipartisanship, she has excluded Hall from negotiations as Democrats denounce the Republican roads plan in the media.
“It is nothing more than a shell game,” state Rep. Stephen Wooden, D-Grand Rapids, told the Detroit Free Press.
Whitmer’s now “says she will work with the state Senate on a compromise,” WGHN reports, though Democrats who control the upper chamber have proposed no solutions.
Senate Majority Leader Winnie Brinks, D-Grand Rapids, this week described Republicans’ incoming legislation as a “nonstarter,” according to Bridge.
“Republicans are asking you to pay more but get less,” Brinks alleged.
Since Whitmer took office, Michigan’s annual budget has increased by 43% to a staggering $86 billion in the governor’s spending plan for next fiscal year, a jump of roughly $30 billion in six years. And yet the roads continue to crumble.
“Our plans for local roads don’t shake down taxpayers for more of their hard-earned money and don’t strap our children and grandchildren with debt like the governor did for highways,” state Rep Jamie Thompson, R-Brownstown, said in a statement following Wednesday’s vote.
“The governor has said for seven years that she’s going to fix the roads, but from driveway to highway in our communities we are still seeing roads that are in terrible shape. We are still hearing from road agencies who do not have the resources to make repairs to roads that need it, and our constituents have been waiting to see results,” she said. “These are serious reforms that will make a serious impact in the places we call home.”
“The money is there. We don’t need higher taxes to fix our roads,” Rep. Ann Bollin, chair of the House Appropriations Committee said in a statement. “We need leadership that respects taxpayers, spends responsibly, and makes roads a priority.”