LANSING – “Heartburn” among majority Michigan Senate Republicans about relying on increasing vehicle registration fees to raise most of the new proposed revenues for roads was the major reason why the Senate dropped its plans Tuesday for a vote on House-passed legislation designed to eventually generate $1.2 billion in new road spending, Senate Majority Leader Arlan Meekhof said.
The Michigan House proposal majority Senate Republicans were considering is a 600/600 split: $600 million in new revenue from a phase-in of a 3.3-cent gasoline tax increase and aligning the diesel tax with the gasoline tax as well as a 40 percent, across-the-board increase on registration fees and $600 million from the General Fund.
The Senate’s proposal, sent to the House in July, did not include such sweeping changes to registration fees, and the issue has been a non-starter in the Senate essentially since Governor Rick Snyder first proposed an increase in vehicle registration fees four years ago.
When the Senate Republicans began caucusing at 8 a.m., the word around the Capitol was that the roads package was a done deal in the Senate, and that with some changes, Mr. Snyder would sign it. But by noon, it was apparent the votes to pass the proposal were not there.
“We’re going to work on some more things to improve the plan,” Meekhof (R-West Olive) told reporters after session. “I’m working with my leadership group tomorrow morning, and obviously there was a lot of heartburn over the registration (fee) part of this plan. I really do appreciate the House sending something over for us to work on. I’d like to see something that passes through the House and Senate, and we’re going to continue to work on that.”
Meekhof was not immediately certain if the Senate would take another stab at the proposal Wednesday. A tentative session agenda sent out late Tuesday did not specifically note the package (HB 4614, HB 4616, HB 4370, HB 4736, HB 4737, HB 4738 and SB 414) would be on General Orders, much less scheduled to go all the way to final passage as a tentative agenda sent Monday indicated.
“We’re committed to working toward a solution, not just a vote,” Meekhof said. “We’ll work with the leadership group and see what other great ideas we can come up with in working with our colleagues in the House.”
Asked if a 400/400/400 plan – also known as the “last, best” Legislative Quadrant plan, according to Meekhof – was still on the table, the majority leader said he had not discussed that with his caucus Tuesday. That plan would have relied upon $400 million from a gasoline tax hike, $400 million mostly through ending the depreciation on vehicle registration fees for new vehicles and $400 million from the General Fund
“We’re concentrated on what the House sent over because they did some good work and we want to honor that as well,” he said.
Asked if maybe the GOP in both chambers needed to go back to the table with Democrats in both chambers, Meekhof said, “I would prefer that we do it with the House and Senate Republicans, but minus that, maybe we go back to the other plan, but I’m not ready to do that yet. I think there’s an avenue, I’m just not sure what it is yet with the group we have in front of us in the House and the Senate.”
House Speaker Kevin Cotter (R-Mount Pleasant) hasn’t shied away from saying both publicly and privately that the proposal his caucus sent over to the Senate last week is the best he’ll be able to do on a road funding solution, and Meekhof acknowledged that on Tuesday. He said because of it, the Senate will have to “find some other creative ways,” to find revenue, and that he and the speaker had talked about some ideas Tuesday.
“But they’re just ideas at this point,” he said, not elaborating further.
And Cotter was more pragmatic than he had been portrayed when he spoke with reporters Tuesday about the Senate’s inability to find the votes to pass his chamber’s proposal.
He said he will continue to work with Senate leadership and is hopeful a final plan can “possibly” be ready at the end of the week.
On the main sticking point in the Senate Republican caucus of the ratio of revenue coming from the registration fee increases, Cotter said there is a “willingness to do whatever we can.”
“We have to get it across the line,” he said.
In the House plan, the fuel tax increase matches the Homestead Property Tax Credit expansion, so it is essentially “tax neutral,” which was a major factor in getting the plan approved with Republican votes, Cotter said.
“We could point to that plan and say it is tax neutral, that is very important,” he said. “That is going to be a challenge for us. But at the same time we want to be very understanding and thoughtful as to the challenges the Senate has.”
Cotter also said Snyder is open to the plan’s breakdown of $600 million from new revenue and $600 million from the existing budget because the General Fund portion is phased in slowly and the registration fee is heavy on the front end.
“The governor has been very vocal about not wanting to do anything that is going to throw off the bottom line of the General Fund. And we respected that,” he said.
Cotter said the reason the House plan uses higher registration fees is because they are viewed differently than the fuel tax increase (though the fuel tax increase did pass the House with one more vote than the registration fee increase) and because the design of the plan offsets the fuel tax increase, and that would not work for the General Fund if those taxes were higher.
Rep. Peter Pettalia (R-Presque Isle), chair of the House Transportation and Infrastructure Committee, said the registration fee increases also naturally increase or decrease based on the price of someone’s vehicle, which was also attractive to House members.
Pettalia said he believes House Republicans will be willing to approve a different ratio of revenue from registration fees compared to the fuel tax, but he said going above $600 million in revenue is a non-starter.
It seems the legislators are so worried about keeping their jobs – when conservative Republicans threaten to run against them in the primaries if they vote for new taxes – that they simple have failed to do their jobs, despite the fact that in poll after poll Michigan tax payers demand they come up with the money to fix the state’s crumbling roads, bridges and infrastructure.
This story was published by Gongwer News Service. To subscribe, click on www.gongwer.com
