Traverse City Record-Eagle

January 16, 2013

Snyder makes tax, fee proposals for road repairs

BY JOHN FLESHER
The Associated Press

— LANSING, Mich. (AP) — Gov. Rick Snyder on Wednesday called for raising an additional $1.2 billion a year to patch up Michigan's ailing roads and bridges, describing the higher taxes and fees that would be required as investments that would provide long-term savings for motorists.

Generating new money for Michigan's transportation network was the centerpiece of Snyder's third annual State of the State address, delivered to a joint session of the state Legislature in the Capitol. The Republican governor sought support from both parties midway through a turbulent term in which he has pleased business interests but alienated Democrats and organized labor with tax relief for corporations and measures that have weakened unions' powers.

Snyder provided few details in his nearly hourlong speech, which also touched on education, insurance reform and a variety of other issues. But in a briefing for reporters beforehand, senior policy adviser Bill Rustem said Snyder favored replacing the tax on fuels paid at the pump with a levy at the wholesale level, which could be passed on to consumers and rise with inflation. He also supports raising the annual motor vehicle registration fee and allowing local governments to increase it even further to raise money for fixing local roads, Rustem said.

Instead of proposing specific tax and fee increases, Snyder tried to make the case for raising the money in the first place — which could be a tough sell in a legislature led by tax-averse Republicans and with Democrats still resentful over his last-minute embrace of contentious right-to-work legislation last month.

"We need to invest more in our roads ... it's time," he said, arguing that while his plan would cost about $120 per vehicle, motorists would recoup most of that by having lower repair bills as highways and local roads are improved. "This is not about costing us money. It is about saving us money and building for the future."

If nothing is done to raise more cash, he said, the cost of fixing Michigan's transportation infrastructure will rise to $25 billion instead of the roughly $10 billion motorists would pay under his proposal, which he said would create 12,000 jobs and prevent 100 crash-related deaths a year.

He appealed to legislators — all of whom will be up for re-election in 2014, as will Snyder — to put political considerations aside, acknowledging that his road program "will go nowhere" otherwise. Instead, he said they should approach the matter as a family would, putting long-term needs first.

"We can decide how long we want to argue about it, how political we want to make it, or we can just use some common sense and get it done," he said.

House Speaker Jase Bolger said Republicans would give Snyder's proposals fair consideration while declining to endorse particular steps. "But make no mistake, we must solve this problem. We cannot punt this to the future," he said.

Tim Greimel, recently elected as leader of the House Democratic caucus, said the speech provided too little information but made clear that "the governor's idea of how to pay for roads is yet further increases taxes and fees paid by middle class and working families."

Michigan's retail-level motor fuels tax has been stuck since 1997 at 19 cents per gallon for gasoline and 15 cents per gallon for diesel fuel. State officials say inflation and improved fuel efficiency have steadily eroded the transportation fund's purchasing power, enabling the quality of Michigan roads to deteriorate. If nothing is done to raise more repair money, two-thirds of the roads will be in poor condition by 2020, Rustem said.

Aides acknowledged it would be difficult to win approval in a legislature where tax-averse Republicans are in the majority, but said the state has no other choice as it seeks to attract new businesses and jobs. Studies show that if nothing is done to generate more funds to fix potholes and repair bridges, 65 percent of Michigan's roads will be in poor condition by 2020, Rustem said.

Elsewhere, Snyder was calling for an array of new initiatives dealing with education, the environment and the economy.

He proposed moving more state social workers into troubled elementary schools, reforming Michigan's no-fault auto insurance program to limit the amount of medical claims, establishing an agency to crack down on insurance fraud, improving mental health services and establishing a state agency to help military veterans obtain federal benefits.

Michigan's schools continue to underperform, Snyder said. Fewer than one in five students are ready for college and more than 60 percent of those going to community college need remedial courses. "That's absolutely unacceptable," he said.

He said he wanted to expand a program begun two years ago called the Education Achievement Authority, which provides resources and new learning strategies for schools with the lowest academic performance in the state. It began with 15 schools in Detroit. He didn't say how many schools should be added to the program. Rustem said a starting point for discussions with lawmakers would be a bill proposed last year that could have included up to 50. Democrats contend it weakens public schools and usurps local control.

Senate Democratic Leader Gretchen Whitmer complained that Snyder said too little about education.

"Over the last two years I've seen this governor and the Republican Legislature push through an agenda that picked corporate bottom lines over the education of our kids," she said. "The key to turning our economy around ... is an investment in education."

Snyder also voiced regret about the bruising legislative battles of 2012, when thousands of angry demonstrators protested the Legislature's quick approval of right-to-work measures making it illegal to require non-union workers to pay fees to the unions that negotiate their wages.

"I hope we can work together," he said, promising "to work hard to find common ground."

But Democrats criticized what they described as a lack of meaningful details in his speech. And several hundred protesters clustered near the main entrance of the Capitol, beating drums and chanting, "Liar." A banner stretched across the stone stairway read, "You can't trust Snyder."