‘I hope that we can work together.’

Snyder calls for higher gas taxes, registration fees



MCT News Service

LANSING — Gov. Rick Snyder called for $1.2 billion in higher gas taxes and vehicle registration fees to help repair the state’s crumbling road infrastructure in his third State of the State address Wednesday, setting up what is sure to be a tough fight for both public support and votes in the Legislature.

Michigan Gov. Rick Snyder delivers his State of the State address Wednesday night in Lansing. The governor proposed fixing Michigan’s deteriorating roads. (MCT News Service Photo)

Snyder — who spoke amid a beefed-up Michigan State Police presence at the state Capitol, where hundreds of noisy union protesters angered by passage of right-to-work legislation last month had gathered outside — called for removing the state gas taxes paid at the pump in favor of a percentage wholesale gas tax.

But he did not lay out a specific percentage value for the new tax or say how much vehicle registration fees should be raised. He wants the Legislature to work out the details.

“This is not about costing us money; this is about saving us money,” said Snyder, stressing that the longer road and bridge repairs are put off, the larger the repair bill will be.

Snyder’s plan calls for a local option under which counties could approve additional vehicle registration increases to fund local road improvements.

The call for more revenues to fix and maintain the state’s crumbling roads — a tough task with a Republican-controlled Legislature that is loathe to increase taxes and with a Democratic minority in an uncooperative mood over the right-to-work battle — was the centerpiece of a wide-ranging speech in which Snyder highlighted key changes of the last two years that included elimination of the Michigan Business Tax, a scheduled phaseout of the personal property tax on industrial equipment and elimination of about 1,000 business regulations.

He said the state is growing, both in population and gross domestic product, its Rainy Day Fund has swelled from $2 million to $500 million, and the state has reduced its long-term retirement liabilities by more than $20 billion.

“We’re a role model,” said Snyder, a Republican. “I wish Washington, D.C., would follow the model we’re achieving.”

Snyder also called for online voter registration and “no reason” absentee voting — two measures to make it easier to vote, which have typically had the support of Democrats.

And he announced support for several other programs to boost dental care for children and early childhood education, and to help veterans get jobs and needed services.

He talked about the divisive debate in December over passage of right-to-work legislation that made it illegal to require financial support of a union as a condition of employment. Snyder has faced accusations of betrayal because he had said for two years that the issue was not on his agenda before coming out in favor of it and backing its passage into law in five days, amid protests.

“I wish it hadn’t happened,” Snyder said of the controversy. “I hope we can work together. I hope we can work to avoid these kinds of situations.”

Snyder has said he supports freedom of workers to choose whether to join a union, but he would not have pursued the issue at that time if he was fully in charge of the political agenda. Pressure to pass the law built after the defeat Nov. 6 of a union-backed ballot initiative to enshrine collective-bargaining rights in the state constitution.

“I liked the tone of the speech of trying to put the past behind us,” said state Sen. Rebekah Warren, D-Ann Arbor. “But it was really lacking on any mention of health care, and we’re going to have a lot of stuff thrown at us. I’m glad he’s focusing on getting funding for early childhood development, but he really had nothing else to say about education.”

The roads issue was Snyder’s big item Wednesday.

The governor wants it dealt with quickly because “the closer you get to the 2014 election, it’s going to be harder to get it through the Legislature,” Snyder’s director of strategy, Bill Rustem, said before the speech.

Snyder tried to sell the need for increased revenue as a way to protect existing assets against further deterioration, rather than as a tax increase, saying the state will have to pay more in the future if it doesn’t raise extra roads money now.

He said some of the investment should be immediately offset because Michigan motorists pay about $81 more per vehicle in repairs than other states do.

He also said the extra road spending would help the economy by creating 12,000 jobs.

Though the Michigan Chamber of Commerce and other groups have come out in favor of raising more money for roads, even the business community isn’t entirely on board.

“While we recognize the need for good roads and adequate funding, this is a difficult time for tax and fee increases on Michigan small business job providers,” National Federation of Independent Business state director Charlie Owens said in a statement this week.

“NFIB small business owners have made it clear that they are not supportive of a motor fuels tax increase or a hike in vehicle registration fees,” Owens said.

The last time state lawmakers hiked the gas tax was in 1997, when a 4-cent hike squeaked through the Legislature under Republican Gov. John Engler.

Early in 2012, lawmakers introduced a proposal to abolish the state’s 19-cent-a-gallon gasoline tax and 15-cent-a-gallon diesel tax and replace them with a 10.1 percent wholesale tax on both.

Based on the current wholesale price of about $2.55 a gallon, such a tax would produce a tax of about 25.7 cents a gallon and generate close to $500 million a year, with state revenues rising along with the price of gas.

State vehicle registration fees are calculated through a somewhat complicated formula based on the manufacturer’s suggested retail price, with certain reductions for used vehicles.

A new 2013 vehicle with a suggested retail price of $25,000 would generate a registration fee of $123, Michigan Secretary of State spokesman Fred Woodhams said.

Hiking the registration fee by about $60 per car or light truck on average would generate as much as $600 million a year, officials said.

Snyder said Sen. Roger Kahn, R-Saginaw Township, will take the lead on the road funding issue. Kahn has been backing legislation for a funding plan significantly different from the one Snyder outlined Wednesday.

Mark Griffin, president of the Michigan Petroleum Association, representing gasoline wholesalers, said a wholesale gasoline tax is the wrong way to go and the state would do better to use sales tax revenues to support roads.

With more efficient vehicles resulting in less gasoline consumption, Michigan shouldn’t be “trying to do what hasn’t worked in the past,” Griffin said.

Likewise, Rich Robinson, executive director of the Michigan Campaign Finance Network, said he didn’t hold out much hope for the no-reason absentee voting proposal. “We’ve been talking about that for years, and nothing has happened,” he said.

Brett Brown, a UAW Local 602 member from GM’s Delta Township plant, was among the demonstrators.

He said it’s wrong for Snyder to put more charges on motorists for vehicle registration fees after giving nearly $2 billion in corporate tax cuts over the last two years.

“I don’t think we’re getting a fair distribution of the responsibility to make this state business-worthy,” Brown said.


Posted by Tribune News Services

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