Government leaders debate merits of Proposal 1

ROCKY ROAD: Area government officials weigh in ballot initiative designed to raise revenue for road repairs. (Pioneer photo/Dan Meloy)

ROCKY ROAD: Area government officials weigh in ballot initiative designed to raise revenue for road repairs. (Pioneer photo/Dan Meloy)

BIG RAPIDS — With the May 5 ballot proposal to raise tax revenue to repair Michigan’s roads, local government officials are contemplating the merits of the proposal and both the advantages and disadvantages the ballot initiative creates for the state’s residents.

The Michigan Sales Tax Increase for Transportation Amendment – Proposal 1 – is a referendum to increase the state’s sales tax for the purpose of raising money for roads, schools and municipal governments.

If the proposal passes, the state’s sales tax will increase from 6 to 7 percent — second-highest in the nation, behind California — and will eliminate all sales and use taxes on gasoline.

The Michigan House of Representatives House Fiscal Agency estimated the proposal will generate about $1.725 billion, with $1.2 billion going towards roads, $130 million to mass transit, $300 million to the school aid fund and $95 million to local governments.

On Dec. 19, the Michigan House of Representatives voted 94-16 and the Michigan State Senate voted 26-12 to put the measure on the ballot, with each resolution obtaining bipartisan support to pass, although 14 Republicans voted against the measure in the House and 11 voted against it in the Senate.

During his State of the State address, Gov. Rick Snyder urged Michigan voters to vote for the proposal, saying the state needed the extra tax revenue to pay for roads.

Since that time, Big Rapids area officials have had the chance to review language of the proposal and while they agree more funding for the roads is needed, certain provisions of the proposal have some officials uneasy about the measure.

On March 2, the Big Rapids City Commission discussed a resolution in support of the proposal, but tabled the motion until the commissioners could further study the issue.

“The city was asked by the Michigan Municipal League to adopt a resolution,” Big Rapids City Manager Steve Sobers said. “The proposal calls for a 1 percent sales tax increase to benefit schools, transportation and municipalities. The proposal would repeal the gas tax and change vehicle registration fees. It would help us with a lot of local tax issues with the city participating in revenue sharing with the state and other municipalities with the funds raised by the proposal.”

Commissioner Loraine James took issue with the provision in the proposal which would activate nine other statues, including increasing the Earned Income Tax Credit from 6 to 20 percent.

“They have an income tax increase buried in the proposal,” James said.

The March 2 resolution the commissioners considered described the proposal as the “last, best solution to solve the road funding issue in the state,” a description Mayor Mark Warba doesn’t agree with.

“Everybody agrees the roads are in need of repair,” Warba said. “But I don’t know if this is the last, best opportunity to fix the roads. There have been plenty of opportunities.”

Warba is disappointed a road-funding solution was not reached in Lansing.

“It’s frustrating those you elect to make decisions do not come up with a solution that everybody can agree to,” Warba said. “You expect the legislators in Lansing to solve this problem, and not punt it down to the people who elected you.”

Mecosta County Administrator Paul Bullock said the measure would help the Mecosta County Road Commission budget, but as a citizen, he recognizes the proposal is not perfect.

“I’m told by the legislature it is the best they could pass,” Bullock said. “The proposal contains a number of special interest benefits that I think will throw people off. I don’t believe it’s perfect, but failure to pass the proposal leaves us with a broken funding system.”

Lack of action from the Legislature on the issue is a common theme among local officials, who feel it is unfair Lansing is forcing citizens to vote for the proposal in the face of deteriorating roads.

“I find the legislation produced to be an inadequate attempt to solve the problem,” City Commissioner Tom Hogenson said. “I think the voters will find the measure incomprehensive. I question if it is ethical for us as a city to support it. It’s a lousy attempt at bipartisan legislation.”

The complexities of the proposal and its confusing language are what have some officials hesitant about supporting the measure. Big Rapids Township Supervisor Bill Stanek feels as a municipality, the township will benefit from the proposal passing, but he is concerned about the hidden costs residents might pay in taxes it will have on residents.

“It would have been much better if it was just about road funding,” Stanek said. “Our people recently passed a road tax – people know we need road funding. But the average person doesn’t understand the proposal, so I don’t think they’ll vote for it. I want to support the government, but they really make it difficult.”

Proposal 1 language:

A proposal to amend the state constitution to eliminate sales and use taxes on gasoline and diesel fuel, allow an increase in the sales tax rate, dedicate revenue for school aid, and revise eligible school aid uses.

The proposed constitutional amendment would:

  •  Eliminate all sales or use taxes on gasoline and diesel fuel used in motor vehicles operated on public roads or highways beginning on October 1, 2015;
  •  Allow an increase in the sales tax rate from 6 percent to 7 percent;
  • Activate other laws dedicating additional revenue for transportation purposes, including repair of roads, streets, and bridges;
  •  Require state funds for school aid to be used exclusively for financial assistance for public school districts, community colleges, and career and technical education and related scholarships; and
  •  Dedicate a portion of use tax revenue for school aid purposes.

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