Snyder signs $1.3 billion plan to mend Michigan roads, transit; fate rests with voters in May



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LANSING, Michigan — Gov. Rick Snyder signed laws Monday to spend $1.3 billion a year more to mend deteriorating roads and other transportation infrastructure, contingent on Michigan voters increasing the state sales tax to 7 percent in May.

The bipartisan package of 11 laws would restructure and ultimately raise flat per-gallon fuel taxes while exempting fuel from the state's 6 percent sales tax.

Other measures would make gasoline and diesel taxes the same, no longer let vehicle registration fees drop in the three years after the purchase of a new car, assess extra fees on electric and hybrid vehicles, and restore a tax credit for low-wage earners.

None of the laws will take effect if the sales tax increase — which cleared the Republican-led Legislature last month and did not need Snyder's signature — is defeated May 5. If the constitutional amendment is approved, school funding would rise by $300 million a year, aid to local governments by $95 million.

"This is a smart investment to make by the citizens of the state of Michigan to invest more in our roads, schools and local government," Snyder said.

The Republican governor and other backers of the plan have less than four months to persuade voters.

In one corner will be business, labor and road construction groups, school superintendents, municipal leaders, environmentalists, advocates for the poor and others who like varying parts of the deal centered around raising taxes to bring highways and streets up to par. The state's 19-cents-a-gallon gas tax was last increased in 1997, and state transportation revenue has not kept pace as motorists drive less and with more fuel-efficient cars.

Snyder emphasized a law he signed, which also is included in the ballot proposal, to eliminate the sales tax on fuel. He said that would ensure taxes at the pump fund roads, bridges and public transit and do not go to other government services.

Opposing what Snyder called a "broad coalition" will be conservative activists and organizations such as Americans for Prosperity, which has called the overall $1.7 billion plan a "massive" tax increase.

"Lawmakers need to do better with (the money) they have," said Annie Patnaude, AFP's deputy state director.

Snyder said opponents of the deal are largely those who "simply don't want any tax increase under any circumstance."

The ballot campaign will cost millions of dollars, and Snyder said he expects to meet with boards of directors for business organizations and ask for financial support.

Teresa Weatherall Neal, superintendent of the Grand Rapids school district, said the extra $300 million in school funding equates to $200 per student. It would bring $3.4 million more to her district annually, she said.

"This is huge for not only for Grand Rapids Public Schools but for other school districts as well," Weatherall Neal said.


Fiscal analysis of major road-funding bills: http://1.usa.gov/1AJC85z


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