Robbing Peter to Pay Paul

Please, don’t take money from our children to pour concrete.

Fixing Michigan’s crumbling transportation infrastructure is one of Michigan’s most vexing problems. Governor Snyder’s legislative liaison Dick Posthumus recently told the MIRS News Service increased revenue for road repair “is our first, second, third, fourth and fifth priorities” for the upcoming Lame Duck legislative session.

Most of us would agree with Posthumus, a former state Senator and Lieutenant Governor under John Engler. What we don’t agree with is the proposal put forward by Speaker Jase Bolger to simply transfer gasoline sales tax revenue from schools to rebuild highways.

Bolger’s plan was put forth in response to the Senate, which proposes to replace the current 19-cent-a-gallon gas tax with a wholesale gas tax of 9.5 percent starting April 1, 2015. It would continue increasing for the next three years, to 11.5 percent in 2016, 13.5 percent in 2017 and 15.5 percent in 2018.

A Senate Fiscal Agency analysis of the plan suggests it could raise somewhere between $781 million and $1.5 billion in additional road funding. The exact amount would depend on the wholesale price of gas.

Instead, Bolger says we should just transfer the sales tax on gasoline to highway funding.  He would do nothing to replace the $755 million portion the sales tax is expected to raise next year.  Since 73 percent of those funds are constitutionally dedicated to education, his plan would result in a $550 million loss to our schools and students.

The sales tax on fuel has long been coveted by the highway construction lobby, which contends every cent of taxes levied on petroleum products should be dedicated to maintaining the roads.  

“The sales tax on motor fuel is really the biggest public policy problem that we have when it comes to funding our roads,” says Lance Binoniemi, vice president of government affairs for the Michigan Infrastructure & Transportation Association, even though Michigan is one of nine states to levy a sales tax on fuel.

Many may agree with Binoniemi, but there must be a replacement for the revenue if that change were to be made. Schools would lose the lion’s share of revenue from that switch, but local communities reliant on revenue sharing funds would also suffer, bringing further cutbacks to police and fire, parks and recreation.

The minimum discretionary per-pupil funding for schools today, at $7,251, remains below the 2008 peak of $7,316 per pupil. Most districts in the greater Grand Rapids area, and throughout West Michigan, receive the minimum per pupil payment. Fewer dollars per pupil translates into larger class sizes, fewer teachers and less attention for students. 

For taxpayers, education and infrastructure are both long-term investments. Stealing from our students to fix the roads is no way to cement a brighter future.

CONNECT 

Fiscal Analysis of Fuel Tax

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