New MI Road Bill: No Cuts

It appears that all the politicians and so called pundits who are saying that the new Michigan House of Representatives road funding plan means cuts to other Michigan programs should keep their powder dry for right now.

I just read an article by Michigan’s own think tank the Mackinac Center for Public Policy, in Midland Michigan, in which it state “contrary to some news accounts” the new plan does not include spending cuts.

We do know that the new House passed bill does include $600 million in fuel and vehicle registration tax hikes, which are supposed to be partially offset by changes to an income tax credit that is predicted to save middle-income homeowners and renters around $200 million a year.

Now we get to the part that critics say will mean cuts to other spending programs in Michigan.

The remainder of the $1.2 billion House road funding plan counts on eventually dedicating $600 million of the state’s growing revenue collections to road repairs. The details are as follows: starting in October of 2018, $150 million from state income tax receipts would be dedicated to road repairs, then in 2019 another $325 million and the following years we reach the $600 million mark.

James Hohman, the assistant director of fiscal policy with the Mackinac Center for Public Policy, believes that it is far more likely that the earmarks will represent a reduction in the rate of growth for some programs, not a cut. He is quoted in the article stating:

“This plan has been described as ‘shifting $600 million in existing state dollars to roads,’ which implies that there will be $600 million in cuts to the state budget. But that is not what legislators did, they dedicated $600 million from an income tax revenue stream that keeps growing. This will allow legislators to continue to devote more money to the roads while also increasing spending elsewhere.”

As Hohman stated in the article $400 million from the state’s General Fund is already being earmarked to road repairs, but right now only on just a year-to-year basis. Which means we would be only looking eventually for another 200 million in increased tax collection, before worrying about cuts to other programs.

I understand that there is a concern that our tax revenues will not grow enough to cover the 200 million per year, should we not tackle that issue when and if we get to that concern?

The full package of bills includes Senate Bill 414 and House Bills 4370, 4610, 4611, 4614, 4616, 4736, 4737, and 4737.

Many do not want any tax increases, remember how badly the previous ballot initiative failed?

That failure came from a disgust of the pork thrown in the road funding bill but there was also a concern that we as citizens of Michigan did not want more taxes thrown on our backs.

Let’s discuss this today on my program, The Live with Renk show, which airs Monday through Friday 9 a.m. to noon, to let me know your thoughts at (269) 441-9595.

Or please feel free to start a discussion and write your thoughts in the comment section.