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Michigan voters reject Proposal 1 tax hike

Leonard N. Fleming and Gary Heinlein
The Detroit News

Michigan voters on Tuesday overwhelmingly rejected Proposal 1 — the sales tax increase and road funding measure crafted by Gov. Rick Snyder and legislative leaders — setting off a fight about how to find more money for transportation fixes.

Voters rejected the measure 80 percent to 20 percent, with 83 counties reporting final results.

Voters made clear their disdain of the complex proposition that included vehicle registration fee increases as well as more money for education, local governments and a tax credit for the working poor.

It was one of the worst ballot measure defeats in more than a generation. Political historian Bill Ballenger said the margin of defeat rivals some "doozies" from the 1970s and 1980s when voters rejected a series of property tax questions.

"This is up there with the rest of them as one of the greatest ballot turkeys of all time," said Ballenger, associate editor of Inside Michigan Politics.

Although Gov. Rick Snyder doggedly campaigned for the measure around the state, he urged lawmakers and voters to find a solution to his three-year effort to get more money for Michigan's deteriorating roads and bridges.

"While voters didn't support this particular proposal, we know they want action taken to maintain and improve our roads and bridges," Snyder said in a concession statement Tuesday night. "The 'relentless' part of relentless positive action means that we start anew to find a comprehensive, long-term solution to this problem. Doing nothing isn't an option as the costs are too great."

The defeat prompted former state Rep. Tom McMillin, who chaired a Proposal 1 opposition group, to say lawmakers could pay the price at the ballot box if they attempt to raise taxes now.

"If they try to vote for a tax increase, they'll jeopardize their political future," said McMillin, R-Rochester Hills. "I think there could be fallout next year."

But House Democratic Leader Tim Greimel of Auburn Hills, who backed Proposal 1, said the loss showed middle-class voters are sick of shouldering the burden of recent tax increases.

"Our families have given Lansing $1.6 billion in new taxes with nothing to show for it — not better schools or better roads — because all that money went to give tax cuts for corporations," Greimel said. "Michigan families are saying to Lansing politicians, 'No more one-sided sacrifice.' It's time for corporations to pay their fair share and help fix the roads."

The rejection of Proposal 1 is expected to spur some lawmakers to try to redirect money from existing state programs to the transportation budget to help fill the $1.3 billion shortfall.

The defeat encouraged John Yob, head of Citizens Against Middle Class Tax Increases, another opposition groups and normally an ally of Snyder.

"The Legislature failed to do their job in funding basic infrastructure and instead tried to convince voters to raise taxes on themselves because they didn't have the political strength to cut the budget or raise taxes," Yob said in a statement. "The proposal was sunk months ago by the campaign's flawed use of scare tactics and the lack of credibility of the Legislature to actually spend the money on roads."

Saginaw area businessman Paul Mitchell, who invested about $500,000 of his money in the opposition group Coalition Against Higher Taxes and Special Interest Deals, said opponents were vindicated.

"People looked at it and the more they saw it, the more they said this isn't for us, and this isn't the best answer," Mitchell said. "Voters made an informed decision. And the informed decision was, this isn't for them."

Safe Roads Yes campaign spokesman Roger Martin conceded as much, saying the complexity of the ballot proposal led to its rejection. He said in dozens of meetings across the state held by supporters of the plan that it was clear there's support for more road repair funding through tax increases, but voters needed about 15 minutes of explanation to understand it.

"The message here tonight clearly is: voters are willing to pay more for roads, but they want a simple, straightforward solution that the Legislature approves — not voters," Martin said. "Voters want the Legislature to approve it."

Margaret Eddington Black, 73, of Detroit was skeptical of the non-road spending items included in Proposal 1, some of which took her by surprise when she read them listed on the ballot.

Plus, she worries, "They keep raising taxes."

But Joanne Hite voted for Proposal 1, even though she didn't like the sales tax hike and thinks the Legislature ducked its duty to solve the issue on its own.

"We need the money to fix the roads and the other local infrastructure projects," said Hite, 69, of Ferndale. "I'm not happy about it … but it's got to be done."

The overall tax increase would have been $1.8 billion to $1.9 billion a year, if voters had approved the plan. Not knowing what the outcome of Tuesday's election would be, state lawmakers did not account for the extra money in the budget plans they began passing last week.

The proposal's complexity annoyed Joyce Coleman, 62, of Detroit, who voted no.

"It should not have been all these other strings attached that if you vote for it, that will guarantee this, that will guarantee that. We were only talking about the roads," said Coleman, who identified herself as an independent. "It should have stayed on the roads."

Proposal 1 had wide backing from business organizations, sheriffs, police officers and chiefs, firefighters and chiefs, and local elected officials. Supporters raised more than $9.3 million, most of it from the road industry, to spread their message.

Denise Donohue, executive director of the County Road Association of Michigan, said she was "crushed" by the overwhelming rejection. She said she was perplexed by some opposition campaigning she considered misleading.

"Since when are police and fire and schools — since when are those special interests?" she said.

In Berkley, Nate Bond, 24, said he voted no because he just didn't trust government to do the right thing with the tax money.

But Kia Essien, 37, of Berkley said she voted yes because the roads are in shambles.

With Proposal 1 failing, said Essien, a former teacher, the Legislature "should keep trying. I know it's difficult and I know pots of money really don't exist anywhere, so I think they should maybe propose it in a different way."

Staff Writer Chad Livengood contributed.