Michigan House Democrats mostly feel like they’re biding their time, as they await a Republican counter-proposal to Gov. Gretchen Whitmer’s call for a 45-cent gas tax hike to “fix the damn roads.”
Whitmer has said she knows that voting to raise the gas tax that much — which would give Michigan the highest fuel taxes in the country by a wide margin — would make for a tough vote for both Democrats and Republicans.
State House Minority Leader Christine Greig (D-Farmington Hills) acknowledged that during an exclusive interview with the Advance this week, but said that until House and Senate Republicans have a tangible plan, everything needs to be on the table.
“At this point, the Republicans have been silent about it, so until they’re coming up with their ideas and we’re actually at the table, then let’s keep all options open,” Greig said. “That includes a 45-cent per gallon increase.”
State House Speaker Lee Chatfield (R-Levering), however, appears anything but open to such a large gas tax increase.
“We’re going to continue to work with this administration,” Chatfield told reporters last week after session. “We’ll be having ongoing conversations on how we can ensure we have more investment in our roads and also have a responsible budget. But there’s two things you can take to the bank: House Republicans will ensure there’s additional investment in our roads and it will not be from a 45-cent gas tax hike.”
Senate Republicans, meanwhile, are working on their own road funding proposal, that will reportedly include some new revenue, “but not a lot,” according to state Senate Majority Leader Mike Shirkey (R-Clarklake).
The governor and GOP leaders spent much of their spring breaks sparring with each other over the topic of road funding on various radio programs.
On the House GOP side, the process of drafting recommendations is just beginning. The chamber’s Transportation Committee had its first of more frequent meetings on Tuesday to begin hearing from experts in fields like civil engineering.
Committee chair Jack O’Malley (R-Lake Ann) said the panel will begin with a “road building 101” course in an effort to dig out “nuggets of truth” around the specifics of road repair and road funding.
Shirkey spokeswoman Amber McCann did not immediately respond to a request for comment Tuesday on what kind of process Senate Republicans will undertake to come up with a road funding solution.
Chatfield acknowledged that the House and Senate are working on their own plans separately, but will eventually work with each other and other stakeholders to bring a final plan to the table.
“There are certainly three legs to the stool,” Chatfield told the Advance last week. “The House, the Senate and the governor. What House Republicans are committed to doing is working with anyone and everyone who has any interest in ensuring our roads are funded.”
As that process plays out, members of the House Democratic caucus say they’ll wait before offering a full-throated endorsement of Whitmer’s specific road-funding proposal that seeks to raise about $2 billion in new revenue for roads while transferring other monies back to the general fund.
The governor’s road funding plan relies on raising the gas tax, which is considered regressive in that disproportionately affects lower-income people.
That’s a problem for some Democrats.
“There are people that believe in this user-fee system of government and this is a user fee. If you think we’re all consumers of government, well, that’s how you would pay for it,” said state Rep. Brian Elder (D-Bay City).
“I would like something that shares the pain a little bit more,” Elder continued, noting that he’d like to explore eliminating some business tax breaks signed into law by Republican former Gov. Rick Snyder.
“Maybe something that claws back some of the tax breaks that went to businesses in 2011 because we gave away $2 billion worth of tax breaks in the budget,” he said.
Whitmer’s budget proposal, however, does have a few different components that she’s touted as reducing regressive nature of the gas tax hike. Specifically, the proposal repeals the so-called “pension tax” on many seniors and increases the Earned Income Tax Credit.
The proposal has largely been praised by several business groups such as Business Leaders for Michigan due to its “user fee” approach, as well as by Gilda Jacobs, the president and CEO of the Michigan League for Public Policy that advocates for low-income people.
“Raising the EITC also offsets some of the regressivity of a gas tax increase and the League’s concerns around its impact on drivers with lower incomes,” Jacobs has previously said. “… We think the benefits of the raised revenue and investments in this budget — to residents with low incomes and their families as well as our state as a whole — outweigh a gas tax’s impact.”
House Democrats told the Advance spoke with over the last week do agree that Whitmer’s plan to raise $2.5 billion in new revenue is a spot-on number.
“What I liked about [the proposal] is that it’s clean and it speaks to the enormity of the problem. It’s going to take 45 cents a gallon to hit these goals,” said Greig, adding that she and other members of the caucus have been hearing from constituents about roads for the last several weeks.
“We’re hearing over and over about shared responsibility, making sure that heavy trucks are paying their fair share, as well,” Greig said. “So I think we’re gathering a lot of information from our constituents, as well, and trying to weigh those issues and we’ll go into those negotiations. But $2.5 billion is the price tag.”
While most estimates peg Michigan’s roads problem around $2.5 billion, there is some discrepancy between the state’s budget experts, however, over just how much Whitmer’s plan would actually raise. The nonpartisan Senate Fiscal Agency arguing that it only raises $1.9 billion, as the Advance previously reported.
State Rep. Yousef Rabhi (D-Ann Arbor) agrees.
“The governor has put out her proposal, what’s the counter-proposal from the Republicans? We want to see that,” Rabhi told the Advance last week. “She’s said this is the benchmark, $2.5 billion. So if the Republican side doesn’t like that, then what’s the solution that they propose? I think $2.5 billion is the number we need to be looking at.”
While Democrats await a counter-proposal from across the aisle, they’re also aware that there could be consequences if a comprehensive road-funding solution isn’t voted into law this term.
“At the end of the day, I think we just need to come up with the money for it. If we fail to do that, I think [Democrats] will probably flip the House [in 2020],” said Elder, who’s serving in his second term with one more to go before he’s forced to leave under the state’s term limits law.
“If [Republicans] fail to fix the roads — if they want to play games with this — it’ll be why I’m in the majority my last term,” he said.