June 2, 2014 at 1:00 am

Opposition holds up Michigan Senate vote on tax increase for road repairs

Lansing — A rare Monday session of the Michigan Senate ended without a vote on Republican leaders’ proposal for fuel tax increases to dramatically boost funding for road repairs.

The plan, on the Senate’s agenda for a third straight session day, was held up amid pushback from Democrats and a conservative business group.

It was removed from a tentative Senate action schedule for today, issued late Monday afternoon, although discussions are planned by Gov. Rick Snyder and legislative leaders.

A five-bill package would raise at least $1.2 billion more annually by 2018 through a higher fuel tax.

But Democrats, who hold 12 of the Senate’s 38 votes, are balking at the fuel tax increase Senate Majority Leader Randy Richardville, R-Monroe, is promoting.

Richardville left for a meeting following the Senate’s adjournment Monday afternoon, but spokeswoman Amber McCann said the Senate leader’s “preference” remains to pass the package of bills this week.

The top goal for the week is to give final approval to Snyder’s plan for protecting Detroit retiree pensions and DIA works of art while the city goes through bankruptcy, she added.

Richardville will hold the first Senate Government Operations Committee hearing on the Detroit plan today. He also plans to huddle with Snyder and the other three top Republican and Democratic leaders about roads and the DIA-pension strategy, according to McCann.

Earlier Monday, Bob McCann, spokesman for Senate Democratic Leader Gretchen Whitmer, had predicted the roads plan was “not happening.”

“It was on the agenda Wednesday,” McCann said. “It was on the agenda last Tuesday. I think they’re just leaving it there, hoping it happens one of these days.”

Richardville’s plan would repeal the 19-cents-per-gallon gasoline tax and 15-cents-per-gallon diesel tax and replace them with a 9.5 percent levy on the wholesale price starting at the beginning of 2015.

The wholesale tax would then be hiked to 11.5 percent in 2016, 13.5 percent in 2017 and 15.5 percent in 2018.

The nonpartisan Senate Fiscal Agency projects the plan would add 7 cents to the price of gas in the first year, based on a wholesale price of $2.77 per gallon.

The Michigan arm of the National Federation of Independent Business announced its opposition Monday to Richardville’s plan.

NFIB State Director Charlie Owens cited the “rising price of fuel and the recent increase in the minimum wage” as reasons why the group opposes a gas tax hike to repair Michigan’s crumbling transportation infrastructure.

As evidence that a gas tax hike now would be unpopular, McCann pointed to a Detroit News/WDIV-TV poll released last week showing 45.5 percent of likely voters say the state already has enough money to spend on roads.

“It shows people aren’t jumping for joy to have a tax increase to repair roads,” McCann said.

Snyder voiced support for Richardville’s plan to gradually phase in the new wholesale tax last week at the end of the Detroit Regional Chamber’s Mackinac Policy Conference.

“I think that’s fine,” Snyder told reporters Friday.

“We need the money for the roads, but in terms of if you looked at acceptance and people appreciating the change in the additional cost, it would be good to phase it in.”

Richardville’s bills amend a transportation funding package the House passed that raises $450 million more annually for roads, but is “revenue neutral” because it heavily relies on tapping the state’s general fund for road repairs.

Those bills passed the House with bipartisan support, but that unity could erode if representatives are asked to raise gas taxes at the start of the summer driving season.

House Minority Leader Tim Greimel, D-Auburn Hills, indicated last week any tax hike that hits middle-class motorists would not fare well in his caucus.

“We’re concerned about any proposal that unduly increases taxes on folks who have already seen their taxes go up under the Republicans,” Greimel said.

Greimel said House Democrats support requiring road construction companies to back up their work with five-year warranties and imposing higher fees on heavy commercial trucks.

“We need to make sure we do a better job of policing heavy commercial trucks and that we’re requiring them to pay their fair share,” he said.

gheinlein@detroitnews.com
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