Can future budget growth pay for Michigan roads?

May 14, 2015

Republicans in the state House have rolled out their plan to boost road funding after Proposal One’s historic failure.

They say their proposal would raise $1.05 billion for roads, mainly by relying on projected growth in the state budget. It would also eliminate the state’s Earned Income Tax Credit for working poor families and Michigan’s film incentives.

House Speaker Kevin Cotter (R-Mt. Pleasant).

The only new revenue would come from indexing the state’s gas tax to inflation and higher taxes and fees on electric, hybrid, and diesel vehicles.

House Speaker Kevin Cotter (R-Mt. Pleasant) says in three years the state’s budget will have an extra $700 million dollars that can be dedicated to roads on an annual basis.

“We have to make roads a priority,” said Cotter. “Spending decisions are always difficult and there are a lot of opportunities to spend money. But we have to get money into the roads.”

The rest of the money would come from diverting money from restricted pools of money in the state budget. For instance, the plan calls for redirecting $75 million in money from tobacco settlement revenue currently going to economic development funds. It would also attempt to redirect $60 million in tribal gaming revenue for roads.

Some have already questioned whether those moves are even legal under current law.

Cotter says the plan is a starting point and he’s open to talking about higher taxes during negotiations.

“I am always going to be one that is more in favor of re-prioritization as opposed to new revenue, but I’m not going to take anything off the table,” he said.

Democrats immediately called the proposal a non-starter.

“This plan is based on future economic wishful thinking and taking money from other already critical priorities of the state and working poor people to make up the lion’s share of it,” state Rep. Brandon Dillon (D-Grand Rapids) told reporters Wednesday.

“It’s a prayer, not a plan,” he later posted on Twitter.