Just over a week after Gov. Gretchen Whitmer insisted during her State of the State address that Michigan can’t fund road repairs without hiking taxes, House Republicans formally introduced a plan to do exactly that.
“My goal is to show (the governor) we can do this responsibly without raising taxes,” House Speaker Matt Hall, R-Richland Twp., told Bridge Michigan.
Hall has promoted Republicans’ plan to pump $3.1 billion per year into the state’s crumbling roads for months, and an eight bill package introduced Tuesday provides a starting point for accomplishing that goal without new taxes.
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The plan aims to nix $1.1 billion in corporate welfare and earmarks, leverage $600 million in higher-than-anticipated tax revenues, cut $500 million in pork barrel spending, and direct all $945 million in annual motor fuels taxes to road repairs.
“Michigan families are already struggling with higher costs, yet the governor’s answer is more taxes – but there’s a better way to get it done,” state Rep. Pat Outman, chair of the House Transportation and Infrastructure Committee and sponsor of one of the road funding bills, said in a statement.
“All the money we need is already at our disposal,” he said. “We just need to stop spending it on corporate handouts and pork projects and start investing in what the people of Michigan really need: better and safer roads – especially the local ones people travel on each day.”
Outman’s House Bill 4187 would redirect $2.2 billion in corporate income taxes to roads, including $600 million that currently spent on housing for illegal immigrants and incentives for businesses currently laying off Michigan workers, he said.
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Last week, Whitmer insisted during her State of the State address that fulfilling her 2019 campaign pledge to “fix the damn roads” will require “new, fair sources of revenue,” and she called on lawmakers to “get back to the negotiating table … to find a long-term, bipartisan solution.”
She followed up by setting up an invitation-only meeting for Thursday to discuss long-term road funding, but did not invite Republicans.
Whitmer was elected in 2019 largely on her 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, the state is facing a $3.9 billion annual road funding shortfall, and “roads are deteriorating faster than the agencies can repair them,” according to an annual road and bridges report.
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Michigan taxpayers, meanwhile, are spending $340 million a year to pay off the $3.5 billion the governor borrowed for road repairs. 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.
The Republican road funding package, House bills 4180-4187, came the same week the public learned of critical details of Whitmer’s road funding plan through legislation introduced by Democrats.
Whitmer previously unveiled her plant to boost road funding by $2.75 billion through 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.
Whitmer would not divulge how much she planned to hike the state’s 6% corporate income tax to generate the $1.6 billion she’s hoping to squeeze from Michigan businesses. House bills 4143 and 4144, sponsored by state Rep. Alabas Farhat, D-Dearborn, call for an 8.5% rate, putting the state among the most expensive to do business.
Farhat’s legislation also includes a new “digital advertising services tax,” according to Bridge Michigan.
Senate Majority Leader Winnie Brinks, D-Grand Rapids, told the news site she’s “ever hopeful and optimistic” the two chambers can work out a deal on road funding, but hedged that “it’s still early” in the legislative session.
“We will engage in a good faith effort to get the road funding plan done and through the Legislature,” she said, “but that requires … willing partners on both sides of the aisle.”
Republicans have repeatedly pointed to a state budget that has ballooned by roughly $30 billion under Gov. Gretchen Whitmer’s leadership with no significant progress on road funding.
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Whitmer’s road funding plan, which also included $250 million for public transit, would swell her proposed spending plans for next fiscal year to a record $86 billion – a 43% increase from when she took office in 2019.
“The problem isn’t revenue, it’s priorities,” state Rep. Ann Bollin, the Republican chair of the House Appropriations Committee, previously said in a statement. “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.”
In addition to cuts to the state’s SOAR program Whitmer has used to dole out billions in corporate subsidies to the EV industry through secretly negotiated deals, the Republican roads plan aims to require the governor and lawmakers to better justify those expenses, as well.
“The projects the state has been backing have created few jobs despite large subsidies, and some of the projects have potentially dangerous ties to organizations affiliated with the Chinese Communist Party,” Outman said. “By allowing this automatic funding earmark to expire, our plan will not only invest in our roads, but it will also require the governor to make a good case for funding any potential SOAR project in the future.”
HBs 4180-87 were referred to the House Transportation and Infrastructure Committee, as was Farhat’s HBs 4143 and 4144.