Whitmer urges business to back gas tax, Michigan Republicans still balking

July 15: Republican ideas to fund Michigan road repairs taking shape over summer

MACKINAC ISLAND — Gov. Gretchen Whitmer stood before a sea of sport coats and seersucker Thursday afternoon, pleading with Michigan’s most influential business leaders to lean on the Legislature to pass a whopping 45-cent gas tax increase for roads.  

Hike the gas tax to generate more than $2 billion in revenue, she said, and fixes to many of Michigan’s other problems — underperforming schools, a skilled worker shortage and, of course, crumbling roads and bridges — will fall into place.

Related: See how much a 45-cent Michigan gas tax might cost you

“I’m asking that you jump in … Seek out a legislator. No matter what side of the aisle they’re on, have the conversation,” she said. “Tell them what failing infrastructure means to you and your business. ... That’s my challenge to you today. Be a part of getting this done.”

The request came during the annual Mackinac Policy Conference on Mackinac Island, a meeting of business leaders and politicians and a place where deals can be made.

Earlier in the day, Whitmer signed into law a major overhaul of the state’s no-fault auto insurance system: a bipartisan deal years in the making and the top priority of  Republican leaders who control the Legislature.

During the celebratory signing, most of the leaders gave a nod to how the negotiation process they’ve practiced in the auto insurance deal is a premonition for how roads funding will shake out.

Related: What the no-fault auto reform deal means for Michigan drivers

But Republican leaders (Senate Majority Leader Mike Shirkey and Speaker of the House Lee Chatfield) said months ago that the 45-cent gas tax hike proposed by the Democratic governor is out of the question — a point they reiterated at a panel discussion later Thursday.

Asked whether Republicans could muster the votes to pass a 45-cent gas tax increase, Shirkey said simply: “Nope.”

Republicans have suggested instead finding places to cut within the state budget to fund roads repairs, though they haven’t yet introduced an official long-term proposal. Nor have they said how money diverted to Michigan’s worst-in-the-nation roads would impact other areas of the budget, such as education.

Shirkey said Thursday, as he’s said before, that a road funding plan will be part of “a very deliberate, focused process” and that his goal is to come up with a long-term solution that gives future legislators guideposts on the same issue.

“The best we can give to this state on this topic is the ability to see forward five, even 10 years,” he said.

Republicans have said a 2015 gas tax increase has yet to be fully realized, and Senate Republicans included in their proposed roads budget last month $132 million to be phased in a year earlier than scheduled — though the 2015 funding is not enough to fully address needed repairs, according to a report commissioned under former Gov. Rick Snyder and corroborated by independent studies.

Chatfield, however, doesn’t buy the $2.5 billion figure, saying the estimate for what’s needed has changed since he came into office. (Originally, the Michigan Department of Transportation estimated only $1.2 billion was needed to fix the state-owned roads. The 2015 funding package instead applied that figure to fix the whole system, not just state-owned roads.)

Besides, he said, “I don’t want to have a conversation about new revenue until every penny that’s paid at the pump is going towards roads,” he said. He’s referring to the sales tax, which is charged on gas but largely goes to K-12 schools instead of roads.

The Republican-led House has not yet released a budget for the state Department of Transportation or a separate roads proposal.

Whitmer’s plea to business leaders is not falling on deaf ears: Those at the helm of Michigan’s largest business advocacy organizations are urging leaders to come up with a roads funding plan.

The Michigan Chamber of Commerce called out Republicans earlier this week for banking on finding efficiencies that aren’t there. Those who are hoping for a magic solution are the “unicorn caucus,” Chamber President Rich Studley said Tuesday.

Improved roads will help facilitate commerce across the state, said Doug Rothwell, CEO of Business Leaders for Michigan. Plus, he said, dedicated funding for roads will avoid money being siphoned off from investment in education and skilled trades training, which feeds growing businesses.

“It’s hard to get people to want to invest in (Michigan) if we don’t look like we want to invest in ourselves,” he said.

Bridge reporter Lindsay VanHulle contributed to this report.