Next four months could make or break Michigan road aid deal
Lansing — If Gov. Gretchen Whitmer wants to "fix the damn roads" during the 2020 election year, she'll have to quickly find consensus with Republican lawmakers, say political operatives who've worked on transportation funding.
Without a compromise in the first few months of the year, the politics of the 2020 election could create an obstacle too divisive to overcome, they say.
"I think there’s at least three or four months, especially within the time frame of the next State of the State address and with the introduction of a new budget," said Rich Studley, president and CEO for the Michigan Chamber of Commerce. "They have a choice to make: Shared responsibility or divided government."
A compromise will become harder to reach as the election nears, said Dick Posthumus, a former lieutenant governor and Senate majority leader who lobbied lawmakers for Republican former Gov. Rick Snyder.
"Politics begin to enter into it more than substance,” he said.
Posthumus helped shepherd the last major increase in transportation funding through the Republican-controlled Legislature in 2015. The package of bills included increasing the gasoline tax by 7.3 cents per gallon to 26.3 cents starting in 2017 and registration fees by 20%, but Michigan's transportation chief at the time said it would only help keep the roads from getting worse.
In February, Whitmer, a Democrat who ran on a campaign promise of fixing "the damn roads," proposed hiking the gas tax by 45 cents per gallon — a plan the chamber supported. The more than 170% tax hike would have generated $2.5 billion in new revenue, including a $1.9 billion boost for roads.
The proposal was resisted by Republicans and some Democratic lawmakers. Rep. Jack O'Malley, R-Lake Ann, who chairs the House Transportation Committee, called it a "lead balloon." House Minority Leader Chris Greig previously labeled it "the extreme that won’t happen."
Whitmer is expected to introduce a new proposal in early 2020. In a Dec. 18 interview with reporters, the governor declined to offer any details but she said every day the state doesn't act, the price tag increases — an amount pegged at more than $2 billion.
"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."
Republican legislative leaders have expressed optimism that a deal can be reached but insist a new road funding plan should include assurances that all taxes paid at the pump go to roads, find savings in the existing budget and cut vehicle registration fees.
The battle ahead
Whitmer says she’s committed “to work with anyone” to get a road funding deal accomplished. In 2020, she’ll be working with dozens of House lawmakers seeking re-election while balancing constituent complaints about roads and drivers' opposition to new taxes.
Her office had little sympathy Tuesday for legislators.
“…Republicans have offered nothing but a half-baked idea to raid teacher pensions and letting our roads return to gravel. That's it,” said Whitmer’s communications director Zach Pohl. “In 2020, Republicans can either choose to work with the governor to get the job done, or they can choose to run on a dirt road agenda heading into November.”
Despite widespread opposition to the 2019 gas tax increase, Whitmer has allies in unlikely corners.
The Michigan Chamber of Commerce, usually influential in GOP circles, scolded lawmakers last year for failing to move a road funding deal. The organization will continue working with the Legislature to make a deal a reality in early 2020, Studley said.
"The best way to get there is through a combination of reprioritizing existing revenue and new revenue," he said, using Lansing's language referring to a tax hike. "At the end, we think it will require additional revenue."
Sen. Tom Barrett, chairman of the Senate Transportation and Infrastructure Committee, rejected the allegation that GOP legislators hadn't offered alternative plans to improve the state's transportation infrastructure.
Barrett, R-Charlotte, specifically mentioned a school pension debt swap generating an estimated $1 billion annually as well as freeing up the 6% sales tax on fuel so it could go exclusively to road repairs instead of aid for schools and local communities.
Whitmer should be "pragmatic" and look at the value taxpayers are getting for their money, Barrett said.
Avoid ballot box
Political experts warned against sending the question to voters in November, noting the failure of a complicated 2015 ballot proposal that would have shuffled and increased sales and fuel taxes to generate more money for road and bridge repairs.
That proposal failed with 80% of voters in opposition.
The "crazy quilt" proposal in 2015 revealed the unwillingness of voters to agree to a tax increase as well as their distaste for overly complicated road funding schemes, said Dennis Muchmore, Snyder's former chief of staff who also worked in the Milliken administration.
"I’ve never been able to figure out how to put a proposal together that’s just straightforward without it taking away somebody’s funding source," Muchmore said. "Those kind of complicated fixes just don’t lend themselves to getting resolved either in the Legislature or on the ballot."
Even a simple, straightforward solution like raising gas taxes by 45 cents doesn’t guarantee success, said Michigan State University political scientist Matt Grossmann. Lawmakers are balancing the need for a fix with voters who “want something for nothing," he said.
Still, Grossmann said he was encouraged by the unresolved road funding discussions when lawmakers went on break in December.
"They ended the year without resolving the situation, yet Republicans have not been using the governor’s promise to fix the roads against her to the extent they could and they left some money in the pot," he said, referring to hundreds of millions of unused dollars left in the budget at year's end.
"Everyone seems to be acting as if there is still a way to reach a deal," Grossmann said.
Posthumus, Snyder's key aide, noted that Snyder wasn't able to persuade fellow Republicans to get a large gas tax increase through the GOP-controlled Legislature. There’s less likelihood Whitmer, a Democrat, will be able to do it, he said.
"If she goes too far down that road, she’ll go to a dead end," Posthumus said.
The former lieutenant governor said his advice to Whitmer would be to focus on the large urban areas of Michigan where the roads are in the worst shape and pursue a plan targeted at those areas.
What went wrong
One of the nails in the 2019 gas tax increase coffin came from Greig, the House Democratic leader who called Whitmer’s proposed increase "dead" and an "extreme" that probably wouldn’t happen. The statement came in late August after six months had passed without a single Democrat introducing the gas tax increase in the Legislature.
The proposal was "too much and too soon," Studley said.
A new package should include a variety of statutory changes and budget bills phased in over a number of years, the chamber president said.
"The roads won’t fix themselves," Studley said. "You can look back on last year and the debate on fixing roads and be frustrated, or you can look back and see if lawmakers, especially in the state House, have used the year to listen."
Rep. Julie Brixie, D-Meridian Township, said she was willing to introduce Whitmer's 45 cent gas tax hike proposal should her caucus or governor ask her, but "it was patently obvious that Republicans were not interested in addressing our road problems this year."
The plan was an "honest solution" to a persistent problem, Brixie said. All the same, she has little faith the New Year will bring a satisfactory solution.
"The Republicans don’t want to talk about it because it’s an inconvenient conversation when you’ve signed a no tax pledge," Brixie said.
Barrett, the Senate Transportation chairman, said the 45-cent gas tax hike plan was the most "universally unpopular" proposal he's seen while serving in the Legislature.
Asked if Whitmer's election was a "mandate" to increase taxes for roads, Barrett responded, "If that truly is the argument, it would be inherent on this governor to build that support, at the very least among her party, and introduce the damn bill."
While Republicans may be in part to blame for the failure of the 45-cent gas tax hike plan, the governor also dealt with a lack of public understanding of the issue and the money needed to fix it, said TJ Bucholz, president and CEO of the Democratic consulting firm Vanguard Public Affairs.
Despite Whitmer’s visits to crumbling bridges and roadways across the state — orange vest and hard hat in hand — it wasn’t enough to sway voters and legislators, he said.
“It can’t be all on Republicans," Bucholz said. "She has to own the lack of understanding in the public that to do things we want to, we need to spend more money on them.”