LANSING – A Michigan Senate
Republican plan to increase funding for roads by more than $1 billion will
likely see a committee vote Tuesday and a full Senate vote Wednesday, sources
said.
The road funding plan Senate Republicans
are expected to move would increase the gasoline tax by 5 cents per gallon a
year for three years, redirect $700 million from other sources and reduce the
income tax, sources told Gongwer News Service on Monday.
Senate Republicans are expected to
discuss the plan Tuesday, and if there is enough support – and sources said
they expect there is – then the Senate Government Operations Committee would
report the plan at a meeting scheduled for 4 p.m. Tuesday. The committee
noticed that meeting earlier today, and Senate Republican spokesperson Amber
McCann said it was in the event the caucus had a roads plan ready.
She declined to provide other
details.
Sources said the cuts and fund
shifts would take effect January 1, 2017, and that the gasoline tax would rise
according to inflation once the three-year, 15 cents-per-gallon increase was in
place. The gasoline tax would first rise by 5 cents on October 1 with
subsequent increases in 2016 and 2017.
In total, the plan would find $1.4
billion, although sources said not all of the money would immediately go toward
construction as some of it would towards repaying debt.
One area of the proposal that
remained unclear Monday was how it would change the income tax. What sources
described was that the income tax rate, now at 4.25 percent, would drop by 0.1
percentage point if the General Fund was robust enough. How far the rate could
drop was not immediately clear, but several Republicans said they hoped it
could fall as far as 3.9 percent, where the rate stood from July 1, 2004, until
October 1, 2007, when it increased to 4.35 percent.
Under the 2007 increase, it
eventually was to roll back to 3.9 percent by October 1, 2015. However, the
income and business tax changes enacted in 2011 set the income tax rate at 4.25
percent and cancelled the rollback.
Legislative Republicans have said
they would like to return the income tax to that 3.9 percent rate.
Each 0.1 percentage point of the
income tax is worth about $200 million.
Another aspect that is unclear is to
what extent Democratic votes would be needed to increase the gasoline tax.
Prior to Monday, Senate Republicans had not briefed Democrats on the details of
the plan, and Senate Democrats already had told Republicans not to bother
coming to them for votes on road funding after the Republican majority passed a
repeal of prevailing wage.
Senate Minority
Leader Jim Ananich (D-Flint) said he and Senate Majority
Leader Arlan Meekhof (R-West Olive) have talked about the plan in loose
terms, but has yet to see “one line of text.” Mr. Ananich declined to
discuss whether Senate Republicans have approached him about Democratic votes
for a road funding plan, and his preference is for a plan everyone can support.
“I’m hopeful that we can still
get there, but I think we’re a long ways off right now,” he said.
The $700 million in cuts, if that is
what the plan contains, is a major concern, Ananich said. The focus has been on
finding at least $1.2 billion in new revenue for roads, Ananich said, and it
needs to be sustainable, not subject to the whims of the appropriations process.
On the income tax component, Ananich
said residents deserve a tax break, but he was unsure of reducing the rate as
the mechanism, saying it would “exacerbate the problem of the cuts.”
Steve Bieda (D-Warren) said he is open to any plan but hopes Republicans
will consider Democratic proposals like addressing the impact of truck weights
on roads.
“I’m willing to take a serious
look at anything they bring forward,” he said.
Bieda, however, did raise some
concern at the expectation that the Senate would quickly pass a plan.
“It strikes me as a really big
policy change to just jam through there,” he said.
Senate Republicans will discuss the
plan at a Tuesday retreat.
This story was published by Gongwer News Service. To
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