Our Editorial: Keep momentumon roads solution
The House late Wednesday passed a $1.2 billion road bill package that is far from perfect, but it’s also far from a done deal. The bills now go to the Senate, where there is an opportunity to make them better.
The need for a comprehensive road funding plan is dire, and any new funds allocated for roads must be put to use right away.
Passage of a roads solution by the House that includes significant new revenue for roads should be welcomed as real progress in ending a stalemate that has dragged on for two years while Michigan’s roads continue to deteriorate.
The package would raise $600 million from a phased-in increase in fuel taxes and a 40 percent hike in vehicle registration fees. The 19-cents-a-gallon state gasoline tax would be increased by 3.3 cents in 2018. The 15-cent diesel tax would rise by 7.3 cents in 2017.
That will be painful for motorists, but is the most responsible way to get new money to repair roads that are destroying their vehicles and damaging Michigan’s competitiveness. The remaining $600 million will come out of the General Fund.
Democrats voted against the proposal, fearing it will require deep spending cuts.
Backers of the bills suggest the General Fund obligation might be covered by future revenue growth. That’s the sort of question that must be addressed in the Senate deliberations.
Gov. Rick Snyder is withholding judgment. He had backed a Senate plan with $800 million in new revenue and $400 million in spending cuts.
The House plan includes phased-in increases in the Homestead income tax credit, including the level of income allowed before it starts to phase out, beginning in 2017.
Democrats describe the tax cuts as giveaways to “millionaires and billionaires.” That’s deceitful hyperbole and not useful in the debate.
The property tax credit would still be confined to the middle class. And if an income tax break ends up in the final package, as the GOP would like, it would benefit everyone equally, since Michigan has a flat tax.
Again, this plan is not perfect. The amount required from the General Fund is too high, considering other urgent demands on the state budget. Those include a hit from the Medicaid expansion, aiding the Detroit school restructuring and upgrading water systems in Flint and other places.
Business Leaders for Michigan came out strongly against the House package, calling it “fiscally irresponsible.”
“Rather than relying primarily on fees paid by the users of our roads and bridges, the House plan would require that half of the $1.2 billion provided to fix our roads will come from existing General Fund dollars,” the group said a statement.
But it is the first roads plan in two years that has passed with the elements of a workable solution.
It should be rationally and thoroughly debated in the Senate. And the governor should certainly be an active participant, as he has been.
The House action should be welcomed as a very encouraging development. Now, it’s on to the Senate, where it should be possible to work out a final version that is broadly endorsed.