GOP leader Chatfield: Road plan should cut vehicle registration fee
Lansing — House Speaker Lee Chatfield is angling for reductions in Michigan's vehicle registration fees as part of a future road funding deal.
Even as Gov. Gretchen Whitmer works on a plan to increase funding for Michigan’s roads, Chatfield has yet to signal his support for any gas tax hike. Instead, he has argued the state should first exhaust other funding options within the existing state budget and pair any eventual gas tax increase with lower registration fees.
“It’s something that can be felt by every single driver,” the Levering Republican said of vehicle registration fees. “And it’s something that I’ve heard about in every corner of the state far more than even the gas tax. It’s something I’d like to see reduced.”
Michigan is still phasing in a 2015 road funding package of gas tax hikes and vehicle registration fee increases that are expected to generate $1.2 billion more a year by 2022.
Those registration fees, which are based on MSRP, have been a source of complaint since 2015 among residents slapped with an annual "birthday tax" to supplement the complicated road funding formula, Chatfield said. That frustration mounts when drivers are unable to see the road improvements supposedly funded through the fee.
Chatfield has taken a fixed position in the road funding debate, refusing to endorse Whitmer’s proposed 45-cent-a-gallon gas tax or any other tax increase until all money paid at the pump goes toward roads and other savings are realized in the state budget.
“Before we ever go back into the pockets of the taxpayers of our state, we have to first ensure that we’re prioritizing the existing tax dollars that we have already,” Chatfield said, arguing the government should pinch pennies “like families are forced to do across the entire state.”
Chatfield hasn’t publicly suggested a specific way to hold harmless the gas sales tax portion currently funding schools and local governments, but he and Senate Majority Leader Mike Shirkey floated ideas for as much during road funding negotiations earlier this year, said Chatfield's spokesman, Gideon D'Assandro.
Among those ideas was a school pension debt swap generating an estimated $1 billion annually, freeing up the 6% sales tax on fuel so it could go exclusively to road repairs instead of aid for schools and local communities.
Shirkey, R-Clarklake, said in February that new revenue likely would be needed to fix the roads, but he has expressed reservations similar to Chatfield's regarding the state's current budget utilization.
"The majority leader's model for road funding has not changed," said Amber McCann, a spokeswoman for Shirkey. "He first wants to direct available dollars, then evaluate cash flow and finally review options for new revenue."
The governor said last week that she was developing a new road funding proposal to introduce in the new year. Whitmer's office on Monday wouldn't comment on "hypotheticals," such as a reduction in vehicle registration fees, but said drivers and businesses relying on the roads are "demanding action."
"After having total control of state government for eight years while our roads were crumbling, the only concepts Republicans have put on the table in the past 12 months involve taking money away from teachers' pensions and letting our roads turn to gravel," said Zack Pohl, communications director for the Democratic governor.
"The governor is committed to fixing the damn roads, but Republicans need to get serious and put a real long-term funding solution on the table."
Drivers and taxpayers are frustrated and skeptical of state leaders when it comes to the roads, increasing the need for transparency and simplicity in any new road funding deal to avoid "echoes of the failures of 2015," said John Sellek, who owns the public relations firm Harbor Strategic and worked as a campaign strategist for former Republican Attorney General Bill Schuette.
With many lawmakers seeking reelection in 2020, the pressure for a simple, effective fix is sure to mount, he said.
"The only way, it would appear, that you can accomplish anything on the roads is to somehow prove to voters that whatever’s being taxed is going to roads alone," Sellek said.
Chatfield, Shirkey and Whitmer this summer tabled a long-term road funding plan after weeks of unsuccessful negotiations. Instead, the GOP-led Legislature proposed a budget that included $400 million in additional revenue for roads, realized through savings in other parts of the budget.
Whitmer vetoed $375 million of the funding and transferred another $25 million to mass transit in part to get lawmakers back to the negotiating table and also because it shortchanged other departments that were relying on the money for work projects and capital investments.
No legislator, Democrat or Republican, introduced Whitmer’s 45-cent-a-gallon gas tax increase, and last week, the governor said she was working on a new proposal. She wouldn’t release details during a year-end interview with reporters.
The more than 170% tax hike plan the governor initially proposed would have generated $2.5 billion in new revenue, including a $1.9 billion boost for roads.
Whitmer declined to say last week whether her new proposal would target more than $2.5 billion in revenue but said the price tag climbs “every day that goes by” without lawmakers addressing the problem.
She said people would be “furious” when pothole season returns in 2020.
“I did what I said I was going to do,” Whitmer told reporters. “Had the Legislature followed suit or worked with me on those things, we could be avoiding the worst pothole season in recent memory, which is what we’re gearing up for.”
Staff Writer Craig Mauger contributed.