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Tag Archive | "Proposal 1"

Voters kill road-funding proposal


 

By Judy Reed

Hopefully the legislators have ears to hear what the voters told them in no uncertain terms Tuesday—go back to the drawing board and figure out a better way to fix Michigan’s roads.

Proposal 1, one of the most confusing proposals Michigan residents have ever voted on, was soundly defeated with 1.4 million voting no, and less than 350,000 voting yes. It is the most one-sided loss ever for a proposal – 80 percent no, 20 percent yes.

Kent County voted 72 percent no, 27 percent yes. Turnout ranged from 4 percent to 49 percent. The City of Cedar Springs had a turnout of 17 percent.

The proposal would have raised the sales tax from 6 percent to 7 percent, removed the sales tax from fuel sales, increased fuel taxes, and raised vehicle registration fees. The changes were estimated to raise tax revenue by $2 billion, with most going for roads; it would also have increased funding to schools, local governments, and mass transit; and given a tax break to some lower income families.

But voters weren’t convinced that the government would do what they said they were going to do with the money.

“In some ways we feel like road agencies and Michigan’s crumbling transportation system were road kill due to an overly-complex ballot proposal,” said Denise Donohue, director of the County Road Association of Michigan.

“The road funding message was an easy sell. Michigan drivers, bus riders, bicyclists, truck drivers and businesses all get the deplorable condition of our roads,” Donohue said. “But the unfounded charges of too many special interests in this bill, and the fears that the Legislature would somehow divert these dollars from road repairs proved too much to overcome in a 10-week timeframe,” she said, alluding to the 10 weeks the County Road Association (CRA) spent trying to educate voters. “But in the end, voters have spoken: they wanted a cleaner road funding solution dedicated specifically to road and bridge repair.”

The CRA estimates it would take $2.5 billion to fix Michigan’s roads. “County road agencies are doing absolutely the best job we can, but we’re working with band-aids, pothole patch and too many temporary solutions,” said Burt Thompson, PE, president of CRA, and engineer-manager of Antrim County Road Commission in northern Michigan. “As a licensed professional engineer, I can attest that our roads require more holistic treatments like resurfacing, milling up existing surfaces, repaving, and replacing thousands of weakened, rusting culverts.”

Gov. Rick Snyder issued the following statement after Proposal 1 failed to garner a majority of votes on Tuesday:

“It’s essential that making Michigan’s infrastructure safer remains a top priority. While voters didn’t support this particular proposal, we know they want action taken to maintain and improve our roads and bridges.

“The ‘relentless’ part of relentless positive action means that we start anew to find a comprehensive, long-term solution to this problem. Doing nothing isn’t an option as the costs are too great. Michiganders need to be able to get behind the wheel and not worry about dodging potholes or seeing plywood to catch crumbling concrete under overpasses.

“We appreciate that this bipartisan plan was supported by so many groups—business leaders and unions, public safety officials and local governments, teachers, and the list goes on. I plan to work with my partners in the Legislature on a solution that gives Michigan residents the safe roads they need and deserve and bolsters our growing economy.”

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Don’t forget to VOTE on road funding May 5


 

A special statewide election will be held on Tuesday, May 5, to decide whether to increase taxes for road maintenance and its outcome will affect every household in Michigan. Some school districts also have proposals on the ballot, but here in Cedar Springs and the surrounding area, we will only be voting on Proposal 1. The Post is rerunning an article we published recently by The Mackinac Center for Public Policy, which breaks down the proposal, and there is a link at the end for further information.

New study analyzes impact of Proposal 1 on taxpayers

The Mackinac Center for Public Policy published a new analysis of Proposal 1, which voters will be asked to approve or reject on May 5. The proposal increases taxes by $2 billion and aims to dedicate most of that revenue for future road construction and maintenance. In addition to reviewing the proposed constitutional and legislative changes, this new study estimates how Proposal 1 would impact the typical Michigan household.

James Hohman, author of the study and assistant director of fiscal policy at the Mackinac Center, used data from the U.S. Census Bureau, U.S. Department of Transportation and the U.S. Bureau of Labor Statistics to estimate that Proposal 1 would increase the tax burden of the typical Michigan household by about $500 in 2016.

“These estimates rely on assumptions about the average price of gasoline and other factors, but they’re about as close as one can get to figuring out about how much taxpayers would pay if voters approve of this plan to increase funding for roads,” Hohman said.

Proposal 1 would make four changes to the Michigan Constitution: increasing the allowable sales tax rate to 7 percent, exempting fuel purchases from sales and use taxes, prohibiting public universities from receiving revenue from the School Aid Fund and earmarking a portion of use tax revenue for the School Aid Fund.

These changes are “tie-barred” with eight legislative bills that will go into effect if voters approve of Proposal 1. These laws would hike the sales and use tax to 7 percent, create a new wholesale fuel tax of 41.7 cents per gallon and earmark this revenue for roads, increase the state’s earned income tax credit, boost spending on one public school program and create new rules pertaining to road construction projects for the Michigan Department of Transportation.

Regarding the proposed wholesale tax on fuel, it is likely that prices at the pump for gasoline consumers will be higher if Proposal 1 passes. Based on data from the U.S. Energy Information Administration, the average national gasoline price in 2015 will be $2.39. At this rate, consumers would pay about 10 cents more per gallon in taxes at the pump.

“The difference between the proposed gas tax and the current one depends a lot on the price of gasoline. But only when gasoline prices exceed $4.20 per gallon will consumers start to pay less at the pump under Proposal 1,” Hohman added.

The analysis found that the proposed new wholesale fuel tax will increase at a rate that will outpace inflation. The mechanics of the formula prescribed in the law to adjust the tax rate based on inflation ensures that the rate will grow faster than inflation.

“The way the fuel tax formula is designed, taxpayers can expect to see fuel taxation rates rise faster than inflation,” Hohman said.

Even though the earned income tax credit would be increased under Proposal 1 (from 6 percent of the federal EITC amount to 20 percent), low-income households in Michigan may not experience much of a tax benefit overall.

“The average EITC recipient’s tax burden will likely be reduced slightly if Proposal 1 passes, but there will be EITC recipients whose overall tax burden will still rise,” said Hohman.

The full study can be found online here: www.mackinac.org/21128

The Mackinac Center for Public Policy is a nonpartisan research and educational institute dedicated to improving the quality of life for all Michigan citizens by promoting sound solutions to state and local policy questions. The Mackinac Center assists policy makers, scholars, business people, the media and the public by providing objective analysis of Michigan issues.

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New study analyzes impact of Proposal 1 on taxpayers


 

The Mackinac Center for Public Policy published a new analysis of Proposal 1, which voters will be asked to approve or reject on May 5. The proposal increases taxes by $2 billion and aims to dedicate most of that revenue for future road construction and maintenance. In addition to reviewing the proposed constitutional and legislative changes, this new study estimates how Proposal 1 would impact the typical Michigan household.

James Hohman, author of the study and assistant director of fiscal policy at the Mackinac Center, used data from the U.S. Census Bureau, U.S. Department of Transportation and the U.S. Bureau of Labor Statistics to estimate that Proposal 1 would increase the tax burden of the typical Michigan household by about $500 in 2016.

“These estimates rely on assumptions about the average price of gasoline and other factors, but they’re about as close as one can get to figuring out about how much taxpayers would pay if voters approve of this plan to increase funding for roads,” Hohman said.

Proposal 1 would make four changes to the Michigan Constitution: increasing the allowable sales tax rate to 7 percent, exempting fuel purchases from sales and use taxes, prohibiting public universities from receiving revenue from the School Aid Fund and earmarking a portion of use tax revenue for the School Aid Fund.

These changes are “tie-barred” with eight legislative bills that will go into effect if voters approve of Proposal 1. These laws would hike the sales and use tax to 7 percent, create a new wholesale fuel tax of 41.7 cents per gallon and earmark this revenue for roads, increase the state’s earned income tax credit, boost spending on one public school program and create new rules pertaining to road construction projects for the Michigan Department of Transportation.

Regarding the proposed wholesale tax on fuel, it is likely that prices at the pump for gasoline consumers will be higher if Proposal 1 passes. Based on data from the U.S. Energy Information Administration, the average national gasoline price in 2015 will be $2.39. At this rate, consumers would pay about 10 cents more per gallon in taxes at the pump.

“The difference between the proposed gas tax and the current one depends a lot on the price of gasoline. But only when gasoline prices exceed $4.20 per gallon will consumers start to pay less at the pump under Proposal 1,” Hohman added.

The analysis found that the proposed new wholesale fuel tax will increase at a rate that will outpace inflation. The mechanics of the formula prescribed in the law to adjust the tax rate based on inflation ensures that the rate will grow faster than inflation.

“The way the fuel tax formula is designed, taxpayers can expect to see fuel taxation rates rise faster than inflation,” Hohman said.

Even though the earned income tax credit would be increased under Proposal 1 (from 6 percent of the federal EITC amount to 20 percent), low-income households in Michigan may not experience much of a tax benefit overall.

“The average EITC recipient’s tax burden will likely be reduced slightly if Proposal 1 passes, but there will be EITC recipients whose overall tax burden will still rise,” said Hohman.

The full study can be found online here: www.mackinac.org/21128

The Mackinac Center for Public Policy is a nonpartisan research and educational institute dedicated to improving the quality of life for all Michigan citizens by promoting sound solutions to state and local policy questions. The Mackinac Center assists policy makers, scholars, business people, the media and the public by providing objective analysis of Michigan issues.

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