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House registration fee hike trips up Senate road talks

Gary Heinlein
The Detroit News
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Lansing — Road funding negotiations will resume Wednesday morning, a day after Senate efforts to pass a long-term financial repair plan collapsed under objections to a proposed 40 percent vehicle registration fee increase.

Following seven hours Tuesday of wrangling over various proposals behind closed doors, Majority Leader Arlan Meekhof conceded his Republican caucus couldn’t secure the necessary 20 votes for passage of the $1.2 billion road repair funding plan.

House-approved legislation boosting to $140 annual registration fees that now average $100 per vehicle was an impossible hurdle for too many in the 27-member GOP majority, Meekhof said. The plan also calls for a $30 annual surcharge on lighter gasoline-electric hybrid vehicles and $100 on heavier hybrids.

“Obviously, there was a lot of heartburn over the registration part of the plan,” Meekhof said, quickly adding that he appreciates the House Republican majority “sending over something for us to work on.”

He said he’d meet with his “leadership team” Wednesday morning, as well as with House Speaker Kevin Cotter, R-Mount Pleasant, and Republican Gov. Rick Snyder to toss around alternate ideas.

“Sometimes you make a run at the goal and you don’t quite make it, so you back up and try a different angle,” he said.

Snyder still greeted Tuesday’s developments as encouraging.

“I believe there is strong forward momentum to provide the resources we need to halt decades of decline in our roads and bridges, making them safer for Michiganders now and for years to come,” he said in a statement.

“There is room to work in the days ahead to ensure a comprehensive transportation solution that’s fiscally responsible and allows us to continue investing in our core priorities that help Michiganders and fuel our state’s comeback.”

Meekhof said he agrees with Snyder that lawmakers have to pass a plan “that doesn’t bust the budget and fixes the problem. We’re not going to risk other priorities in order to do this; we’re going to do it in a sensible way.”

Democrats and Republicans began meeting in closed-door party caucuses two hours ahead of the normal Senate starting time Tuesday in anticipation there would be a vote on a Senate version of the nine-bill roads package the House passed a week ago.

Through much of the day, the GOP majority discussed a plan containing a new wrinkle: setting aside $100 million annually for “innovation.” The Senate proposal under discussion also retained fuel tax and vehicle registration fee increases passed by the House.

It would have called for the House-passed mix of $600 million in new tax revenue and $600 million in earmarked General Fund money to add $1.2 billion a year to the road repair fund, but not reach that goal until 2021.

Democrats blasted it as another way to delay and inadequately fund state and local road repairs.

“If you’re going to raise taxes, you should make sure you’re solving the problem you’re trying to fix,” Sen. Curtis Hertel, D-East Lansing, told The Detroit News. “The way that this plan was laid out, the full funding doesn’t actually come until 2022. By the time we get there, the roads will be in worse shape, the materials to fix them will cost more and we’ll never solve the roads problem.”

The $600 million in General Fund spending on roads would come from expected annual state revenue increases, but might have to be shifted from other departments in years when revenue increases were insufficient. Democrats and Snyder have qualms about the latter possibility.

General Fund shifts to road repairs would start at $150 million in the 2018 budget year under the last version of the plan before Tuesday’s vote was canceled. They’d go to $325 million in 2019 and $600 million in 2020.

The first $100 million raised each year from fuel tax increases would go to a Roads Innovation Task Force directed to research road repair techniques that last 50 years. The money could be released only through a concurrent resolution passed by the House and Senate.

Innovation and 50-year road fixes are a theme often sounded by Sens. Patrick Colbeck, R-Canton, and Mike Shirkey, R-Clarklake. Both have opposed tax increases.

The plan, including a boost in the Homestead property tax credit, would divert a total of $806 million from the state’s $10-billion general fund each year. With accompanying income tax cuts proposed by Republicans, that figure could surpass $1 billion, Democrats charged.

The 19-cents-a-gallon state gasoline tax would be increased by 3.3 cents to 22.3 cents a gallon. The 15-cent diesel tax also would rise to 22.3 cents a gallon. After 2021, both would go up annually at the rate of inflation or 5 cents, whichever was lower.

Like the House plan, the Senate legislation would roll back Michigan’s 4.25-percent income tax rate whenever economic growth led to sufficient increases in state revenues. The last version would have delayed the start of such rollbacks until 2023.

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