House paves way for $1.2B road funding vote

Chad Livengood and Gary Heinlein
Detroit News Lansing Bureau
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Lansing – The Republican-controlled Michigan House is set to vote Wednesday on a $1.16 billion, four-year plan for generating more money for fixing the state’s roads, mostly from existing revenues.

The House on Tuesday made slight changes to a 12-bill package sought by Speaker Kevin Cotter that relies heavily on $700 million in future income and sales tax growth to fund road repairs — a departure from Michigan’s traditional user fee system of fuel and vehicle registration taxes.

The House Fiscal Agency estimates the package of bills would generate $1.04 billion from current revenue sources by the 2019 fiscal year. The remaining $119 million would come from a new fee for electric vehicles, an increase in the diesel tax rate from 15 cents per gallon to 19 cents and future inflationary increases in fuel taxes.

House Republicans rejected a series of amendments offered by the minority party Democrats to lower the state’s highest-in-the-nation truck weights and end discounts in the vehicle registration code for certain vehicles, such as farm trucks.

“Our vehicle code has too many special carve-outs,” said Rep. Marilyn Lane, D-Fraser.

Democratic Rep. Jim Townsend of Royal Oak unsuccessfully attempted to tie the end of a tax credit for the working poor to a constitutional amendment creating a system of higher tax rates for higher earnings.

Elimination of the Earned Income Tax Credit is one of the more controversial aspects of the House Republican road funding plan. It would generate $127 million through higher income tax bills on low-income families that qualify for the credit, according to the House Fiscal Agency.

Gov. Rick Snyder’s administration has been actively lobbying against two bills that would divert $135 million from the Michigan Economic Development Corp. to the state’s transportation fund. The governor’s office would need to get all 47 Democrats and eight Republicans to stop those bills from passing.

But even if the House approves the MEDC bills, their passage in the Senate is not certain.

“Our caucus will have a struggle with that,” Senate Majority Leader Arlan Meekhof, R-West Olive, told The Detroit News on Tuesday. “Business attraction is important if we’re going to keep our economy growing. Let’s put it this way: The other states aren’t going to lay down their tools. In fact, if I were them, I’d double down.”

The House GOP road funding plan also would impose a new $100 fee on light-weight electric vehicles.

Rep. Jeff Irwin, D-Ann Arbor, sought to amend the bill by adding an extra fee for heavier vehicles and commercial trucks.

“If we wanted people to pay their fair share, we should be putting additional fees on very heavy vehicles … which do more damage to our roads,” Irwin said.

Majority Republicans rejected Irwin’s amendment.

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