Whitmer: Road funding solution 'next up' after no-fault reforms
Mackinac Island — Just days after the Legislature passed historic no-fault auto reform, Gov. Gretchen Whitmer is challenging GOP House and Senate leaders to support her 45-cent gas tax increase or propose another viable plan.
In a Tuesday interview with The Detroit News, Whitmer said she has yet to hear of a real alternative to her gas tax increase that could raise the $2.5 billion her administration says is needed to fix state roads and free up dedicated general fund dollars for other top budget priorities like K-12 schools. The portion targeted for roads would be $1.9 billion.
No legislator has yet introduced a bill with the governor's gas tax hike. Several lawmakers have offered to introduce the legislation needed to pass the increase, Whitmer said, but she’s asked them to hold off until the partisan rhetoric on the issue has calmed down.
“Some have suggested that there’s an easier or a less difficult way of doing this, but no one’s put any alternative out there that’s real,” Whitmer said the day before the Detroit Regional Chamber's policy conference is set to launch Wednesday.
Senate and House Republicans are each developing alternative road funding proposals in response to Whitmer’s plan. Senate Majority Leader Mike Shirkey, R-Clarklake, said in April the upper chamber’s proposal would be “dramatically different" than the 45-cent gas tax increase proposal that would give Michigan the highest fuel taxes in the nation.
Still, the governor seemed buoyed by the bipartisan support for no-fault auto insurance reform passed last week and hoped the collaboration would “carry forward.” Whitmer said the infrastructure issue appears to be “next up” on the legislative to-do list.
She unsuccessfully sought to link no-fault insurance reform with a road aid package, getting rebuffed by Shirkey and House Speaker Lee Chatfield, R-Levering.
The state Legislature passed the no-fault auto insurance reform in a rare Friday session that ended a decades-long stalemate over the 1973 auto insurance law. Past reform efforts have failed because of intense lobbying from the insurance industry, hospitals, trial attorneys and auto crash victims.
The new plan mandates insurer rate reduction for eight years by ending Michigan’s requirement that drivers purchase auto policies guaranteeing unlimited lifetime medical benefits. Instead, drivers will be able to choose their level of personal injury protection and the new law puts a cap on what medical providers can charge auto insurance companies for care.
Whitmer is expected to sign the legislation, but she won’t be dwelling on the reform package for too long.
“We are going to pivot and put as much energy into that, as much energy as we did into no fault, into actually addressing the infrastructure problem and getting the budget done,” she said.
The governor got a boost Tuesday as the Michigan Chamber of Commerce, local government and builder groups renewed called for state lawmakers to work with Whitmer on a long-term infrastructure funding solution.
“We’ll continue to challenge members of the ‘unicorn caucus’ — people who believe that there is a magic solution to this problem that no one’s ever seen — to explain how they would pay to solve this problem,” Michigan Chamber of Commerce President Rich Studley said during a press conference in Lansing.
Whitmer’s proposed 45-cent-per-gallon gas tax increase would generate about $2.5 billion for roads. The current fuel tax is 26.3 cents per gallon.
The road funding need was exacerbated by the $1.3 billion supplemental budget that lawmakers passed during the lame duck session at the end of 2018 “on the way out the door” for many state leaders, Whitmer said.
“Had we put this solution on the table, it would have changed dramatically in that last 24 hours of the outgoing leadership,” she told The News.
Michigan’s bad roads got worse in 2018 and the condition of the state’s aging infrastructure is not projected to improve over the next decade despite a 2015 funding law that is still being phased in, according to an annual review by the Transportation Asset Management Council.
Among the 88,000 lane miles of paved Michigan roads that are eligible for federal aid —freeways, arterials, minor arterials and major collectors — experts rated 21% in “good” condition, 38% “fair” and 41% “poor.”
Some Republican lawmakers have suggested they could wring efficiencies out of the current road funding system to lessen the amount of a gas tax or other funding increase.
While some penny pinching may be possible in the Michigan Department of Transportation, "there's only so much you can do with efficiency," Studley added.
Road funding advocates say raising the fuel tax could help motorists save on costly vehicle repairs necessitated by damage from poor roads. They argue that spending now will help the state avoid a bigger price tag down the line because it is cheaper to maintain a decent road than replace a bad one.
“When it comes to infrastructure, when it comes to roads … Michigan communities are suffering mightily,” said Dan Gilmartin, executive director and CEO of the Michigan Municipal League.
“We cannot have great businesses in this state, we cannot have a great economy in this state, we cannot attract talented workers to the state unless we have great infrastructure, period, end of story.”
The chamber supports a “user fee” model like a fuel tax hike, and Studley said the remainder of 2019 should be a “window of opportunity” for lawmakers to act in a non-election year.
“There is no example in modern history of any lawmaker in the House or Senate who has voted for increased funding to fix the roads not being re-elected,” he said.
While Republican President Donald Trump has floated the idea of a major boost in federal infrastructure spending, he walked out of a related meeting with Democratic leaders last week amid a bitter battle over congressional inquiries into his 2016 campaign and a special counsel report on Russian election interference.
“This is a Michigan problem that needs a Michigan solution now,” Studley said. “There’s not a pot of gold at the end of the federal rainbow.”