By COLLIN KRIZMANICH
Capital News Service
LANSING — By now you’ve seen the ads on TV, heard them on the radio or read the op-eds in your local paper: Proposal 1 is either a devastating tax increase on all hardworking Michiganders or a crucial investment in our crumbling infrastructure.
So what exactly does Proposal 1 do?
One of the common criticisms of the Proposal is that it’s too complicated. It does more than just fix roads. Here’s what the proposal would do if approved by voters, according to the Senate Fiscal Agency, a nonpartisan government agency that provides analysis of legislation:
— Change the 19-cent-per-gallon gasoline tax to a 14.9 percent tax per gallon of gasoline. At the current price of gas, this would increase the tax paid per gallon from 19 to 36 cents. It would increase with the price of gas rises. The revenue raised through this tax is earmarked for road improvements.
— Eliminate sales tax on fuel for vehicles, in part offsetting the gas tax increase.
Increase road construction warranty requirements.
— Allow municipalities to solicit competitive bids on new projects.
Some aspects of the proposal seemingly have nothing to do with roads, but they offset the impact of reallocating funds that the proposal directs towards them. That includes:
— Increasing the state sales tax on non-fuel goods from 6 percent to 7 percent.
— Increasing the Earned Income Tax Credit from 6 percent to 20 percent.
The House Fiscal agency estimates that Proposal 1 will increase revenue by $1.6 billion per year. Of this amount, $1.2 billion will go toward roads, $130 million will go to mass transit, $95 million will go to local governments and $300 million will be added to the school aid fund.
Who supports Proposal 1?
The most prominent supporter is Gov. Rick Snyder, who recently filled potholes in downtown Detroit to urge voters to support it.
Snyder has told reporters that there’s no plan B if Proposal 1 fails. The Michigan Senate and House both passed plans to address failing roads and infrastructure last year but were unable to agree. So they are sending voters to the polls.
Safe Roads Yes! is a statewide coalition of Proposal 1 supporters, including chambers of commerces, police, firefighter and sheriff associations, local governments and others.
“We went through a committee process and then the board of the directors, and decided this was our best chance at a long term solution for Michigan roads,” said Joshua Lunger, public policy coordinator for the Grand Rapids Chamber of Commerce.
Grand Rapids voters recently passed an initiative that increased the city income tax by 0.2 percent to address deteriorating roads. The city aims to bring 70 percent of roads into good condition, but is relying on the state to meet much of that goal.
“The way we see it is, our biggest parts of the economy — manufacturing, agriculture and tourism — all really rely on a strong infrastructure,” Lunger said. “Even with the new revenue coming in from the income tax extension, we’re only going to get to about 50 percent. That other 20 percent was reliant upon state action.”
Who’s against Proposal 1?
Perhaps the most notable opponent Snyder’s Attorney General, Bill Schuette. Schuette recently told MLive the proposal has “lots of potholes and pitfalls.”
Statewide, groups such as the Concerned Taxpayers of Michigan, the Coalition Against Higher Taxes and Special Interest Deals, Citizens Against Middle Class Tax Increases and others, agree with Schuette.
Some are upset that legislators tied road funding to a ballot proposal.
“It’s a real question about having higher standards for our lawmakers,” said Adam de Angeli, executive director of Concerned Taxpayers of Michigan. “Road funding is an ordinary item in 49 state budgets and it should really not be a crisis in Michigan.”
Which way is the public leaning?
The polls don’t look good for supporters.
A recent EPIC-MRA poll found that only 24 percent of voters would vote yes on the proposal, with 66 percent voting no. But ballot initiatives in non-election years are hard to poll. And despite an apparent advantage, those campaigning against Proposal 1 are not letting up.
“We’re cautiously optimistic,” de Angeli said. “But our job is to run as if we’re 10 points behind and do everything we possibly can.”
So what happens if the proposal fails?
Michigan’s roads will continue to deteriorate. Advocates say that is why it’s important it passes and the roads are addressed now.
“We’re basically on a cliff and it’s going to become much more expensive to fix,” Lunger said. “Any long-term solution that we even get to in the future is going to be even tougher as far as revenue or cuts are concerned.”
Opponents say that a defeat will put the problem back into the hands of the legislature, where they believe it should have been solved in the first place.
“The fact is they simply have to find money in the budget,” de Angeli said. “The whole premise that we have to raise our taxes higher than ever before just to have the same roads just doesn’t make sense to people.”
By COLLIN KRIZMANICH