Back to the Drawing Board in Michigan

Although Michigan voters rejected a ballot proposal Tuesday that would have raised sales taxes, gasoline taxes, and vehicle registration fees, the debate over how to boost funding for the state’s deteriorating infrastructure is far from over. 

Leading up to the election, 87 percent of likely voters said that if defeated, lawmakers should immediately begin work on a new plan to fix the state’s transportation system.  It appears voters were turned off by what The Detroit Free Press described as “one of the most complicated and confusing questions ever placed on a Michigan ballot.”  Had the measure passed, it would have triggered ten other laws that dealt with issues such as offsetting the tax increases paid by some low-income families via a boost in the state’s EITC, and reimbursing local governments for the revenue loss they would otherwise have faced under the plan.

Some voters said that lawmakers showed “cowardice” by bringing a plan to voters rather than raising revenue through the normal legislative process.  These voters are likely to get their wish in the months ahead.  Polling indicates that a straight up sales tax increase could be popular.  There is also talk about asking businesses to pay more, particularly since they saw their taxes slashed dramatically under the tax package signed by Gov. Rick Snyder in 2011.

The ballot measure was a complicated mix of tax increases and tax cuts that anti-tax advocates trumpeted as a tax increase on working people.  An ITEP analysis found that while most Michiganders would indeed pay more, the bottom fifth of Michigan taxpayers would actually receive an average tax cut of $24, and it would be the state’s highest earners that would face the largest increases.  For the vast majority of drivers, the increase would be a relative bargain given that the poor condition of the state’s roads costs most drivers over $500 per year in vehicle repairs.

Now that voters have defeated the measure, anti-tax advocates have begun spinning this election as evidence that voters are unwilling to pay higher taxes.  But the reality is that just 37 percent of Michigan residents think spending cuts alone could free up enough money to bring the state’s infrastructure up to 21st century standards.  When asked about cuts in specific programs, the results were similar.  Majorities ranging from 63 to 88 percent of voters oppose major cuts in K-12 education, universities, public safety, and health care for the poor, elderly, disabled, and children.

The hard truth is that Michigan’s roads are not going to fix themselves, and the state has to raise money some way to bring roads up to par. Gov. Snyder has conceded as much.