Michigan Governor: With Insurance Deal Done, No Time to Waste on Road Fixes

Gov. Gretchen Whitmer said talks with Michigan’s Republican-led Legislature on her proposed fuel tax increase can “start in earnest” following the enactment of a bipartisan auto insurance overhaul, and there is no reason why a road-funding deal cannot be struck within a month.

Her 45-cents-a-gallon tax hike, the centerpiece of her budget proposal, has languished in the Capitol for three months.

“A lot can happen in a short period of time,” the Democrat said after signing the insurance bill at the Detroit Regional Chamber’s Mackinac Policy Conference. She said she expects to see legislative movement soon.

“We can’t waste time. Our roads are downright dangerous,” she said. “I’m going to continue to push the gas tax and if someone has an alternative way of doing that, I’m eager to have that conversation. I think it’s going to start in earnest now.”

Whitmer again signaled that she will not sign the next state budget without a road-funding deal, due to how her $2.5 billion proposal would free up general funds that have been shifted to address deteriorating roads but which could be used for other priorities such as schools and her proposed scholarship program for college students. Budget legislation, she said, can be finished by the end of July.

GOP legislative leaders have rejected a 45-cent increase that would make Michigan’s gasoline and diesel the highest in the country. But they have not laid out their own plans except to support spending an additional $132 million a year earlier than planned and potentially ensuring that sales tax paid at the pump funds roads. The revenue mostly goes to schools and local governments under the state constitution.

House Speaker Lee Chatfield of Levering said he will not box himself in with an “artificial” deadline to complete the budget, noting that the next fiscal year does not start until Oct. 1.

“I think the first priority needs to be (to) have a responsible budget, and that’s going to be our focus,” he said.

Senate Majority Leader Mike Shirkey of Clarklake was reluctant to say how much additional road spending is necessary but agreed that “substantially more” is needed. He suggested working to finish the budget by July 1 and passing supplemental spending legislation in September if a broader roads agreement is reached.

“It’s got to balance between the appetite of taxpayers and the capacity to deploy assets,” he said, referring to concerns about how quickly road-construction projects could be ramped up at a time that a 2015 transportation-revenue plan is still being phased in.

Later Thursday, Whitmer delivered a keynote speech in which she urged the conference’s crowd of business, civic and other leaders to press legislators to act. She said a gas tax hike is preferred because the revenue would be constitutionally dedicated to roads. Generating $2.5 billion also could be done by more than tripling the 6% corporate income tax, boosting the 4.25% personal income tax to 5.3% or raising the 6% sales tax to 7.4%.

“The solution I put on the table truly is I think the best solution to actually fix the problem,” said Whitmer, who showed video of a pothole-ridden road in northern Michigan that she took to the conference. She also displayed photos of bridges, the deadly 2007 collapse of a bridge in Minnesota and charts indicating that the 2015 roads plan slowed the decline of roads but will not improve them. Bridge conditions, she said, “keep me up at night.”

Whitmer drew applause when she said lawmakers should not take their summer break until successfully negotiating road and budget laws with her.

Related:

• Bill to Cut Auto Insurance Premiums Passed by Michigan Legislature

Topics Legislation Michigan