Proposal 15-1 and what it means for Grant Township roads

April 24, 2015

Dan Dysinger, Grant Twp Supervisor

Dan Dysinger, Grant Twp Supervisor

We all remember the now famous statement made by the former Speaker of the House, Nancy Pelosi in 2010, when debating the Affordable Care Act; “we have to pass this bill to see what’s in it.” Apply the same principal to Proposal 1, there are such a myriad of changes it is indeed daunting to understand and using the word “complex” is a mere understatement. As we know the last constitutional change in the sales tax was 1994 with Proposal A. Since its passage the Michigan Department of Treasury has rolled, chopped and kneaded the law into a loaf of bread that is tasteless to Michigan Citizens. Basically, we could say that Proposal A has outlived its usefulness, our national and state tax system is without debate, a mess.

Now the Michigan Legislature in a fox hole last December and lobbyists in feeding frenzy mode, passes Joint Resolution UU. The resolution became Proposal 15-1; “road funding solution” is in simple terms 63% for roads and 37% for other programs. One could ask how could our road funding issues become so complex. It’s easy to understand once you see how politics works in Lansing. When it fell into a free for all melee in the waning hours last December, the floor coverings at the halls of legislation in Lansing were worn thread bare, by lobbyists and legislators alike. In reviewing Proposition 1, they all ran, wearing their shoes out, to make sure they could participate in the luau of tax plenty. Merely hogs at the tax trough.

CapCon News from the Mackinaw Center for Public Policy and the House Fiscal Agency analysis breaks revenues down this way; Sales Taxes $1.3 billion, Fuel Taxes (net change) $448 million, Vehicle Registration fees $95 million, totaling about $1.9 billion including the “Amazon Tax” at $60 million, which is enacted regardless of the vote. Additions and subtractions leave road funding at $1.2 billion with that amount fully being available in 2018. Legislative analysis reports are quite fluid with numbers changing weekly, one can only estimate.

The road portion of funds would be distributed under the formula established in Public Act 51. Proposition 15- 1 changes the following: Income Tax Act, General Property Tax Act, Non Profit Street Railway Act, General Sales Tax Act, Use Tax Act, Michigan Strategic Fund Act, Michigan Trust Fund Act, State School Aid Act, Public Act 51 and Revised School Code, I’m probably missing a few others.

Grant Township roads will still be left bare even with such a massive increase of taxes at the State Level. Indeed, it will raise an estimated $2.5 million more for the Clare County Road Commission. But that extra revenue will not be fully felt until 2018. And the extra revenue for the CCRC, needs to be distributed among 16 Townships. At best it would mean that local road funding match money would return, whereby the Road Commission would have a set amount to use in matching Township road projects. Maybe returning to the 25% / 75% sharing formula: 25% Clare County Road Commission and 75% Township. The local match in Clare County disappeared in 2006 due to funding shortfalls. It will increase revenue sharing to local governments based on per capita allowances or population, for Grant that could be about $30,000.
The most complete and simple solution was in front of the legislative leaders long ago, indexing fuel taxes by the most insidious and sinister tax of all, inflation. It didn’t need a vote of the people either.

There are a number of Local Governments and other Organizations supporting the tax increase, their reasons vary, and the most likely answer is, because nothing else is on the table. A safe and good roads program needs to address that issue only, not other funding wants. Proposal 1 will generate a tax nightmare for decades, one which makes the present tax system even more incomprehensible. There is a better funding solution, Legislators need to set down, roll up their sleeves, swallow, don’t vomit, lock the door and emerge without being cornered by a lobbyist. Talk about road funding, no other subjects, just road funding and keep it simple. Taxes are already unpopular, why make it worse with complexity, just make it simple.

The fourth President of the United States, James Madison once said, “It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood”. President Madison was wise and the foregoing statement fits Proposal 1. This is very condensed to show how we got here; it’s your choice, say no and send legislators back to the table or say yes and adopt more confusion and waste in Lansing.

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