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Lansing — Republican legislative leaders emerged from a Thursday meeting with Democratic Gov. Gretchen Whitmer without a road funding deal but with hopes for an eventual consensus solution.

The two sides appear to remain far apart, however, with a Whitmer spokeswoman saying a GOP plan laid out in the meeting would jeopardize school funding and is "built upon a core element" the governor does not support. 

“Conversations are ongoing and real progress is being made,” House Speaker Lee Chatfield, R-Levering, told reporters in his Capitol office after the roughly hour-long sit-down across the street. “So I’m optimistic we will have this problem tackled before it’s too late.”

Whitmer and the Legislature have until Oct. 1 to finalize a 2020 budget and avoid the state’s first government shutdown since 2009. The Democratic governor has signaled she would be willing to sign a temporary continuation budget if they are engaged in good-faith negotiations.

Republicans rejected Whitmer’s budget plan for a 45-cents-a-gallon fuel tax hike to fund road repairs but have not publicly released a long-term infrastructure alternative after promising to develop one. 

Senate Majority Leader Mike Shirkey, who previously suggested Republicans could release some road funding ideas by late May, did not speak with reporters after the meeting but entered it by saying “everything’s on the table.”

Ideas floating around Lansing include a smaller gas tax increase, a teacher pension debt swap proposal that could free up cash, more revenue options for local road agencies and a sales tax on transportation services like Uber and Lyft.

Chatfield has also pushed to remove the sales tax on gasoline to ensure all taxes paid at the pump go toward roads. But doing so would jeopardize funding for schools and local governments, which are supported by sales tax revenue.

"Republicans finally offered a plan, but it is unfortunately built upon a core element that the governor has long said she will not support," said Whitmer spokeswoman Tiffany Brown. 

"No one should be surprised that gutting our kids' education to fix some roads is off the table. Their core element cuts education spending by $400 per pupil statewide, which neither fixes the damn roads nor serves our kids."

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Michigan House Speaker Lee Chatfield, R-Levering, talks road funding after an Aug. 22, 2019, meeting with Gov. Gretchen Whitmer. Jonathan Oosting, Detroit News Lansing Bureau

Shirkey spokeswoman Amber McCann rejected Whitmer's characterization, saying the Senate GOP leader from Clarklake "presented multiple options" to the governor on Thursday, "none of which have a negative impact on schools."

"All major policy initiatives require cooperation and compromise from all parties involved," McCann said. "Senator Shirkey is committed to delivering a road funding plan to Michiganders and remains hopeful the governor will be a partner in that plan."

Chatfield said he thinks the people of Michigan agree with him that all taxes collected at the pump should go toward roads.

He also appeared interested in the idea of expanding the state's existing 6% sales tax to services like Uber or Lyft, telling reporters people using “roads-based services” should be paying to help fix those roads.

House Republicans have generally resisted the idea of implementing a smaller gas tax increase than the one Whitmer proposed, but Chatfield did not completely close the door.

“I’ve got the votes in the caucus to put a plan on the governor’s desk that spends the taxpayer dollars responsibly,” he said, suggesting a focus on spending cuts in other budget areas to free up road money.

“But this is not solely what’s best for the House, the Senate or the governor. This needs to be a consensus plan, and that’s what we’re working towards right now.”

The Republican-led Legislature and GOP former Gov. Rick Snyder raised fuel taxes and registration fees in 2015 as part of a road funding plan designed to eventually dedicate $1.2 billion a year in additional revenue to roads. But experts project the quality of roads and bridges across the state will continue to deteriorate without more spending.

Whitmer’s fuel tax plan would have generated $2.5 billion when fully implemented, with $1.9 billion going toward the roads and bridges and additional revenue going toward her other top priorities, such as K-12 public schools.

The plan would have given Michigan the highest fuel tax rates in the country. But the GOP-led House and Senate ditched the idea in separate budgets they approved that would increase or accelerate road funding by smaller amounts than Whitmer wants.

Michigan’s current 26.3-cent gas tax ranks 27th highest, according to the nonpartisan Senate Fiscal Agency. While the state is spending record amounts, it ranked 48th in the country on a per-person basis for spending on state and local highways in 2016.

Local roads are funded relatively well in comparison, according to the analysis. Michigan ranks third in the nation for the amount of local road grants-in-aid and direct spending by state and local road agencies.

Whitmer’s plan would have created a new distribution model to focus on the state’s most heavily trafficked roads. Chatfield said he is interested in revisiting that proposal but not opening the 1951 law that governs most local allocations.

“I do believe that southeast Michigan roads are in worse shape than northern Michigan,” he acknowledged. “What I do want to make sure is being done is no taxpayers in northern Michigan are paying higher taxes only to fix roads in Southeast Michigan. I think that’s unfair.”

The Michigan House is expected to resume session next week after a two-month summer recess. Senate Republicans met briefly on Tuesday and had an off-site caucus meeting to discuss the budget, road funding and other matters. 

Chatfield said he expects Republicans and Whitmer will continue to "bounce" around ideas over the next couple of weeks heading into September, which is shaping up to be a big and busy month in the state Legislature. 

"I think we all just need to understand the fact that we've been here before," he said. "We need to take a deep breath. We need to act like it. This is how negotiations are made, and I feel very encouraged by the conversations I've had with the governor today."

joosting@detroitnews.com

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