Michigan House passes GOP roads package without Democratic counter-proposal in sight
- House Republicans passed a $3.1 billion road funding proposal on Wednesday
- The legislation raises no new taxes but would necessitate substantial budget cuts
- While Gov. Gretchen Whitmer has outlined a roads proposal, state Senate Democrats have not offered a specific plan of their own
LANSING — Michigan’s Republican-led House on Wednesday approved a plan that would pump more than $3 billion a year into road repairs but gut key economic development programs and force spending cuts in other areas.
Democrats allege the plan would lead to budgetary shortfalls and cuts in critical services, while Republicans have emphasized their plan funds road repairs without requiring new revenue.
State Rep. Pat Outman, R-Six Lakes, called the package a “real, long-term solution that finally invests in the roads that impact our communities most.”
The package passed mostly along party lines, but had as many as seven Democrats — including former Speaker Joe Tate, a Detroit Democrat — voting yes on parts of the package.
The passage of the House plan will likely set the stage for negotiations with Democrats who control the state Senate and with Democratic Gov. Gretchen Whitmer, but Senate Democrats have yet to outline a specific road funding proposal beyond a broad outline Whitmer offered earlier this year.
House Democrats decried the funding cuts inherent in the GOP package, arguing the legislation would cut funding for essential services, something Republicans denied.
Canton Democrat Ranjeev Puri, the House minority leader, called the plan “a terrible use of our state dollars.”
“We are strident in our pursuit of finding a plan” that’s durable and long-lasting, Puri told reporters. But when asked what components of a road funding plan House Democrats would support, he declined to name any.
Whitmer criticizes plan
The House package stands in marked contrast with what Whitmer has proposed — namely, securing a majority of the funding through new taxes on major businesses and marijuana.
Whitmer’s office criticized the Republican plan in a statement provided to Gongwer New Service on Tuesday, saying it would lead to mass layoffs, create a budget deficit and cut local services.
Whitmer press secretary Stacey LaRouche told Bridge the House plan “does not achieve” the goal of sustainable, long-term road funding.
“The governor is open to suggestions from Republicans and Democrats, but inaction is not an option,” LaRouche said.
The governor’s proposal, however, is vague by design and relies on Democratic policymakers to put forward a specific plan. State Rep. Alabas Farhat, D-Dearborn, has proposed related legislation in the House that would raise the corporate income tax, among other things, but Farhat’s proposal is unlikely to gain traction in the Republican-controlled House and the Democratic-led Senate has not put forward a proposal.
“What is the Senate Democrats’ roads plans?” House Speaker Matt Hall, R-Richland Township, said in a Wednesday press conference. “It’s crickets.”
Senate Majority Leader Winnie Brinks, Democrat of Grand Rapids, responded in a statement calling Hall’s comments “nonsense” and calling Republicans’ roads proposal a “nonstarter.”
“Republicans are asking you to pay more but get less,” Brinks said.
What’s in the House roads plan?
The nine-bill House package passed the chamber just one day after it was approved in committee. At times, up to seven Democrats joined Republicans in approving the legislation, though some Republicans also voted against aspects of the package that would have technically raised taxes.
The House GOP plan would:
- Replace the 6% sales tax on gasoline with an inflation-pegged 20-cents-per-gallon increase in the motor fuel tax, an increase that would be directly sent to roads and equals about $1 billion per year.
- Earmark $2 billion a year from the corporate income tax to roads, with 90% going to local agencies. It would grow to $2.2 billion after 2030.
- End funding for economic development programs Whitmer has championed, including $550 million for the Strategic Outreach Attraction Reserve Fund.
- Effectively push recipients of Michigan Economic Growth Authority tax credits away from the subsidies by increasing the tax rate they’d pay under them to 30%.
Republicans argue that, because the size of state budgets have increased more than 40% over the past five years — culminating with an $83 billion budget this year — Michigan can pay for road repairs without raising taxes. Still, there would have to be hundreds of millions of dollars in budget cuts that the House’s proposal — as well as Whitmer’s — have assumed without offering any detail.
All told, the plan would generate about $3.2 billion in annual funding for roads, according to the nonpartisan House Fiscal Agency, but it would decrease general fund revenue by a similar amount, which would force lawmakers to consider cutting other spending.
“I think we made it very clear” that state government spending would be scaled down in that state budget, Outman told reporters, but “nothing essential is gonna get cut.”
The road ahead
Whitmer has previously praised Hall as the only other leader with “the guts and brains” to put forward a plan during her tenure, but there hasn’t yet been any significant negotiations between the two leaders. Hall said the leaders have yet to meet together this year.
“She wants to raise taxes all over the place,” Hall said of Whitmer while acknowledging “the corporations are going to have to pay one way or another.”
Still, Whitmer and House Republicans agree on substantial portions of the plan. She has also proposed replacing the gasoline sales tax with a dedicated road funding tax and earmarking business taxes for road repairs.
Republicans have emphasized their roads plan would focus funding on local roads. As Hall was speaking to reporters, Whitmer announced $3 million on Wednesday afternoon to repair individual streets in 16 municipalities.
Still, at the same time, a specific plan from Senate Democrats has yet to materialize. Farhat has introduced the only specific proposal, which includes raising the corporate income tax, yet he voted in favor of GOP road funding bills on Wednesday.
“Maybe Democrats do need to come up with some sort of plan that stakes out our broad principles about what we would view to be a meaningful step forward on roads,” state Rep. Noah Arbit, D-West Bloomfield, said.
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