Lansing lawmakers are seemingly looking at every conceivable solution to fund the repair of the state’s notoriously crumbling roads.
Every option, that is, with one exception. According to one economic analyst, doing absolutely nothing might be the best path forward.
“Lawmakers have agreed that they want to spend more money on road repair but disagree on whether they should find those funds by cutting the budget or increasing taxes,” said James Hohman, an analyst for the Mackinac Center for Public Policy, a Michigan-based, free market research nonprofit.
Speaking with The Center Square, Hohman explained: “But they can also wait. Economic growth generates more income taxes, sales taxes and other tax revenues and roads can be a priority for increasing revenue.”
Gov. Gretchen Whitmer, a Democrat, is promoting a 45-cent gas tax increase to fund the repairs. The proposed gas tax hike is anticipated to raise $2.5 billion.
David Robertson, a former Republican state senator from Grand Blanc’s 14th District, notes that the governor has been unsuccessful finding a Democrat legislator willing to sponsor her measure.
“Essentially, Gov. Whitmer is attempting to undo what Republican legislators did in 2015,” he said. “We established a $500 million road tax increase in exchange for capping spending increases for other budgetary items, but she wants to give that allocated money to schools.”
Meanwhile, the governor and legislators are weighing how much they might tax online gaming and sports betting should the state legalize them during this fall’s legislative session. Some tax proceeds would be used to fund road repairs, but Whitmer wants to increase a pending Republican 8 percent tax plan to 40 percent for Internet gaming and 15 percent for sports wagering.
Hohman, however, says state tax revenues have increased 15 percent above inflation due to the state’s economic growth, adding that Michigan collected $8.7 billion more in taxes in fiscal year 2018-19 than in 2010. He estimates that the additional annual tax income of $1.5 billion would be more than enough to repair the roads without any additional taxes.