STERLING HEIGHTS, Mich. (AP) - When Democratic gubernatorial candidate Mark Schauer took questions during a recent visit to a union hall in suburban Detroit, meat cutter Jim Mesich brought up a long source of frustration for Michigan drivers: crummy roads.
Why not, he asked Schauer, repeal a business tax cut and put all the money toward improving roads? Better that, he said, than asking “common guys’’ to pay more at the pump.
Schauer criticized Republican Gov. Rick Snyder for being unable to persuade the GOP-led Legislature to pass a road-funding fix and said Snyder’s ”trying to raise taxes on you’’ through proposed higher gasoline and vehicle registration taxes. But Schauer was less specific in detailing how he as governor would raise the minimum $1.2 billion more a year that Snyder said is needed to avoid drastic deterioration of roads and bridges.
Schauer favors keeping in place the corporate income tax that Snyder enacted, so that’s off the table as a potential pot of money. He said he would look for savings in state departments to redirect to the transportation budget, lobby Congress to send more federal gasoline tax revenue back to Michigan and ask companies to pay their ”fair share’’ in increased fees on overweight and oversized trucks.
It’s unlikely those moves alone would generate enough money, however, or be seen as a permanent road-funding solution. A House-approved bill that’s pending in the Senate, for instance, would generate just $8.6 million more than the current $4 million a year in special fees assessed on heavy trucks _ a fraction of the $3.7 billion transportation budget.
Schauer, who voted for Michigan’s last state gas tax hike as a freshman lawmaker in 1997, may be leaving the door open to another one. He criticized the idea when unveiling his jobs plan in July, but when asked this month by The Associated Press if he was ruling out gas tax or license plate fee increases, he said: “I’m just saying we have to do this fairly.’’
Snyder and Republican legislators, he said, “have proposed tax increases on the same people they’ve already raised taxes on’’ - a reference to the 2011 tax overhaul that slashed business taxes but eliminated or reduced tax exemptions on retirement income and credits for homeowners, renters, children and low-income earners. Before talks on road funding stalled in June, Democratic legislators pushed for bills that would make more homeowners and renters eligible for an income tax break, a demand they wanted in exchange for helping increase the gas tax.
Both gubernatorial candidates agree something must be done.
Michigan spends less per driver on roads than any other state. It ranks 33rd in spending per lane mile and 47th per vehicle mile traveled, according to a state Transportation Department review of 2012 Federal Highway Administration Data.
Yet Michigan also has some of the country’s highest taxes at the pump, about 10 cents a gallon above the national average. That’s because the 6 percent sales tax is also applied to motor fuel but mostly goes to schools and local governments under the state constitution.
Flat per-gallon fuel taxes - 19 cents for gasoline, 15 cents for diesel - are faulted for declining state transportation revenue as people drive less and with more fuel-efficient vehicles. Though vehicle registration and title revenue is up, it hasn’t offset the drop in fuel tax revenue, a problem given inflationary construction cost increases.
Snyder, who blames election-year politics for the most recent legislative opposition to his call for more tax revenue for roads, said residents pay hundreds of dollars annually on unnecessary vehicle repairs due to poor roads. Repairing deteriorating highways now would help boost economic development and save taxpayers a much larger bill down the line, he said.
Schauer said if he was governor, he could strike a bipartisan deal, referring to his time in Lansing when then-Republican Gov. John Engler signed a 4-cent gas tax increase.
Both Schauer and the incumbent, though, know the major political obstacles to dedicating $1.2 to $2 billion more a year to roads and bridges.
Mesich, a 57-year-old from Warren, said pothole-ridden streets are damaging his vehicles.
“We pay enough taxes. I’m not opposed to paying taxes because nothing is free. Just be fair,’’ he said.
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