After gaining approval from Gov. Rick Snyder’s (R) administration in January, Proposal 1 goes before Michigan voters May 5.
Beyond repairing Michigan’s roads, the proposal also aims to raise funds to improve the state’s mass transit system, increase the state’s Earned Income Tax Credit and provide additional resources to cities and schools, among other provisions.
David Waymire, spokesperson for Safe Roads Yes!, a special interest group advocating for Proposal 1, emphasized the proposal’s importance.
“Michigan’s roads are in very serious disrepair,” Waymire said. “Some of them are dangerous, and the situation is getting worse everyday. There is insufficient money in the state budget to be able to get ahead of the deteriorating roads. This is the one and only proposal that has made it through the legislature that will help us repair all roads.”
The proposal aims to repair Michigan’s roads and other infrastructure upgrades, but it has a potential to result in serious implications for higher education funding as well. The proposal calls for an increase in the sales tax from 6 to 7 percent, along with the removal of the sales tax on fuel sales. Currently, fuel sales taxes fund schools through the School Aid Fund and provide funding to local governments.
About 20 percent of the yearly appropriation for public universities comes from the School Aid Fund. Under the proposed bill, public universities will no longer receive this money. However community colleges and K-12 education will continue to receive money from the fund. While there is potential for the proposal to impact University appropriations, public universities in the state have only recently been allocated funds from the School Aid Fund and, in the past, have always relied on the General Fund for allocations.
Waymire said while it could conceivably affect higher education funding, if anything, the proposal will make it easier for institutions to draw from the General Fund.
“In the last couple of years, we’ve taken money out of the General Fund, when it clearly could be used for higher education or other purposes, not to say that it would have, but it could have, and used it for roads,” Waymire said. “Passing this will take pressure off of the General Fund, and will allow those decisions to be made by the legislature.”
If approved by voters, the money from the 1-percent increase in the sales tax would be put into the General Fund, and would be guided toward offsetting the eliminated state sales tax on fuel. Government officials predicted this 1-percent increase would result in an additional $300 million per year for schools.
This increase is projected by the Senate Fiscal Agency to raise $2 billion in state revenue every year.
Many residents support the improvement of state roads, however, not all think this plan is the best way to go about it. Some believe increasing the sales tax benefits special interest groups and hurts low-income residents.
Randall Thompson, a spokesperson for the Coalition Against Higher Taxes and Special Interest Deals, a group against the enactment of Proposal 1, emphasized how for some, the 1-percent increase can be a considerable burden.
“A guy making $1 million a year — is he really going to miss 1-percent sales tax? No, because he can already meet his basic needs,” Thompson said. “But to a single mom or a college student, 1-percent sales tax? That’s an additional 16.7 percent (in tax) on every single thing you purchase.”
Thompson said 40 percent of the $2 billion that will be raised in revenue for the state will go to other projects and only $1.2 billion will go towards fixing the roads.
Dave Murray, Snyder’s deputy press secretary, wrote in an e-mail that it is improper for the administration to tell people how to vote. Rather, he said, state employees and the Safe Roads Yes! campaign can provide information about the roads and advise voters.
In addition to the roads proposal, the legislature is still making changes to Snyder’s state budget proposal.
In a February interview, Rep. Al Pscholka (R–Benton Harbor), chair of the appropriations committee, said his ideal goal would to have a budget by May 29.
In an interview with The Michigan Daily in March, Murray said he hoped the budget process would conclude by June, but noted that the budget was far from being finalized.
Snyder announced that higher education will see a 2-percent increase in funding, but also said the 2015 budget had a projected shortfall of $325 million. The 2016 budget has a projected shortfall of $532 million.
To account for these shortfalls, the governor proposed multiple cuts to the State Police, the Department of Corrections and the Department of Community Health.