On May 5, Michigan will vote on Proposal 1, an initiative that seeks to repair Michigan’s deteriorating roads. Proposal 1 aims to raise the sales tax from 6 to 7 percent, exempt fuel sales from the sales tax and create an additional tax for fuel sales that would go toward road repairs and public transportation, among a host of other measures. The additional 1 percent in sales tax would help cover the revenue lost from fuel sales that currently goes to schools and municipalities. Though a roundabout way, overly complicated to obtain funding, voters should vote yes on Proposal 1 due to the necessity of road repairs and lack of sufficient alternative plans.
Passing Proposal 1 would bring 10 bills into effect, several of which go beyond simply moving around taxes to raise funds for road repairs. In addition to raising the sales tax and creating a fuel tax for road repairs, this proposal would also increase registration fees for trucks, do away with discounts for new car registrations and add surcharges on electric vehicles. Additionally, some of the revenue gained through the new fuel tax would be used to pay off debt accrued by previous roadwork. The Earned Income Tax Credit for low- to moderate-income families would also be raised from 6 to 20 percent, returning the rate to pre-2011 levels.
According to a 2014 study by TRIP, a national transportation research group, Michiganders pay $2.3 billion each year in additional vehicle operating costs associated with poor road conditions, which includes unnecessary repairs. The Michigan Transportation Asset Management Council deemed 38 percent of Michigan’s roads to be in poor condition. While staggering, these statistics can hardly come as a surprise to anybody who has driven in Michigan; Michigan’s roads are in dire need of repair.
The hike in sales tax Proposal 1 would allow is far from outrageous. As of Jan. 1, 2014, Michigan had the 13th lowest sales tax rate in the country, and a 1-percent increase would hardly push Michigan to the top. Furthermore, Michigan’s highway expenditures per capita are the lowest in the nation, at $126 per capita. Therefore, increasing spending on roads seems not only reasonable, but integral. Proposal 1 has the groundwork in place to fix the roads, which is crucial to the safety of Michiganders and the state of our roads.
That said, Proposal 1 is not without flaws. It is a complicated and bloated plan, which can deter and confuse voters. The state legislature should aim to draft bills that are concise and accessible to voters; Proposal 1 clearly fails in this regard. Additionally, sales taxes are regressive taxes, and as such, the 1-percent sales tax hike and added fuel tax would disproportionately target those on the lower end of the socioeconomic spectrum. This is a regrettable aspect of the proposal. However, it should be noted that the reinstatement of the EITC to 20 percent would help offset this damage.
Furthermore, while Proposal 1 does include wording that mandates local governments create a system for tracking roadwork projects, measures to ensure preventative maintenance are vague. If Proposal 1 passes, Michigan lawmakers must develop a plan to guarantee the roads stay fixed.
According to the American Association of State Highway and Transportation Officials, “Costs per lane mile for reconstruction after 25 years can be more than three times the costs of preservation treatments over the same 25-year period.” Deferral is no longer an option. Michigan roads must be overhauled to prevent the continual accumulation of costs from temporary repairs.
Proposal 1 is the only plan in place to effectively fund and fix Michigan’s roads. Although it might initially be perceived as unfairly affecting those with lower incomes, it accounts for this issue through its funding for EITC. The necessity of road repairs ultimately outweighs the proposal’s issues. Vote Yes on Proposal 1.