Michigan House Republicans are accusing House Democrats of “trying to tax … problems away” through a road-funding plan that increases the corporate tax and creates new taxes.
Michigan House Democrats unveiled their $1.2 billion funding plan after Republicans proposed an $850 million road-funding plan that did not increase any taxes.
Republicans sought to divert all sales tax revenue collected through gasoline purchases to fund roads, rather than following Democratic Gov. Gretchen Whitmer’s plan to raise more than $2 billion through a 45-cent gas tax hike. To pay for the plan, Republicans use money through agency administrative cuts and other savings.
“Republicans showed just last week in their budget proposal that they could find $850 [million] in additional road funding every year without raising taxes one cent,” Gideon D’Assandro, a spokesperson for the House Republicans, told the Center Square via email. “The House Democrat plan falls into the same trap as the governor’s plan – trying to tax all of our problems away by targeting the state’s working families instead of putting in the work to build a real, responsible plan.”
The Democratic bill package calls for a 2.5 percent increase in the corporate income tax and the introduction of a 4.25 percent flow-through parity tax. The legislation would create a six-cent-per-mile travel tax on the two heaviest classes of trucks, which are all trucks that weigh 26,000 pounds or more. It would also create a bridge toll for tractor trailers, similar to the RhodeWorks Tolling Program in Rhode Island.
House Democrats formed their plan after a series of resident coffee hours and town halls, as well as an online survey conducted by the party. The unscientific survey survey found that 22 percent of respondents supported higher taxes on corporations to fund roads, 20 percent supported increased fees for heavy trucks, 17 supported fewer incentives to corporations and 16 percent supported income tax reform to increase taxes on the wealthy. Other ideas, such as toll roads, a fuel tax increase and increased vehicle registration fees received significantly less support.
“Too often the conversations that are happening at the top are very far removed from the real, everyday experiences of the people in our state,” House Democratic Leader Christine Greig, D-Farmington Hills, said in a news release. “So we went to the source and we asked people in our communities directly, what do you want to see done about our roads? And we came up with a way to make that happen. Good policy always starts at the ground level, and that’s where these policies came from.”
James Hohman, director of fiscal policy for the Mackinac Center for Public Policy, told The Center Square in an email that road quality is often used as an excuse to increase taxes for other budget priorities.
“Road funding is already at record highs and there have been budgets passed to add more without raising taxes,” Hohman said. “There is substantial disagreement about how much further is needed and how quickly it is needed to improve the state’s road conditions.”
Republicans have a majority in both the House and the Senate, but need their bill to be signed by the Democratic governor.