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Analysis: Whitmer won on ‘damn roads;’ now she owns them

November 7, 2018

Crain’s Detroit 

By: Chad Livengood

Should she stand for re-election in four years, the Michigan governor’s race in 2022 could come down to one overarching question: Did Gretchen Whitmer actually fix the damn roads?

Whitmer’s campaign slogan of “fix the damn roads” found the pulse of voters as she sailed to a 9-percentage point victory Tuesday over Attorney General Bill Schuette and became Michigan’s 49th chief executive.

The newly minted Democratic governor-elect’s first major political challenge may be selling a Legislature with a smaller Republican majority on raising taxes for infrastructure that a larger GOP majority refused to do for Republican Gov. Rick Snyder three years ago.

Her Republican opponent struck out with a tax-cutting “paycheck agenda” as Michigan experiences an economic boom and the lowest unemployment rate in 18 years.

Schuette’s vow to reduce the state income tax from 4.25 percent to 3.9 percent — a tax cut that amounts to an annual savings of $175 for an individual with $50,000 of taxable income — didn’t come close to resonating with voters as much as Whitmer’s salty message about the Michigan’s long-neglected roads and infrastructure.

“The result of yesterday’s election is that people really sent us a very clear message: They want us to fix the damn roads,” Whitmer said Wednesday.

Now she has the daunting task of delivering before the roads deteriorate further and become more of an economic albatross for Michigan.

“Let me tell you, she’s going to be held accountable for fixing the damn roads,” said pollster Richard Czuba, president of Glengariff Group Inc. in Lansing, who called Whitmer’s campaign slogan politically “brilliant.”

There’s only a small window for Whitmer to get a Republican-controlled Legislature to swallow the size of tax increase that they rejected in the fall of 2015 when lawmakers passed a $600 million tax hike. That amounted to a 7-cents-per gallon increase in state fuel tax on unleaded gasoline and a 20 percent hike in vehicle registration fees.

That tax hike didn’t kick in until January 2017 — two months after the November 2016 election, of course — and the overall $1.2 billion road-funding plan won’t be fully funded until 2021.

Republican lawmakers assumed the gradual increase in funding would satisfy the state’s needs. The rapid deterioration of roads in Southeast Michigan last winter calls into question those assumptions.

And Whitmer exploited the GOP’s miscues and brushed off Schuette’s warnings that a Gov. Whitmer would deliver a 20- to 40-cents-per-gallon gas tax increase.

She never would commit to an actual dollar amount.

But unlike past elections in Michigan when taxes mattered a lot, voters apparently weren’t spooked by Whitmer’s clear lurch toward their wallets. That may be a sign that voters understand these tire-rim-bending roads won’t fix themselves.

Whitmer has said she wants to boost the $1.2 billion to $2 billion and use the additional state-generated taxes to draw down another $1 billion in matching federal funds.

The reality is, the $1.2 billion road-funding plan Gov. Rick Snyder signed in September 2015 was never going to fix all of the roads. In fact, they’re just getting worse with each passing winter, according to MDOT.

For state highways and trunk lines alone, MDOT projects pavement conditions will fall from 75 percent rated as “good” or “fair” today to 66 percent in 2021 and 48 percent in 10 years.

During the campaign, Schuette called Whitmer’s willingness to raise taxes “an economic collapse plan.” Based on MDOT’s projections, the current road-funding model is arguably a bridge collapse plan. It only partially paves over the problem.

“While transportation agencies are certainly very grateful for the legislative action that will provide some new state funding for transportation beginning in 2017, the reality is that the need for investment, particularly in roads and bridges, will not be fully addressed by that action,” Snyder’s 21st Century Infrastructure Commission wrote in its 189-page report that’s been gathering dust in Lansing for two years.

The commission estimated Michigan needs to spend $4 billion more annually on transportation, underground water infrastructure and broadband internet.

Whitmer, who spent 14 years in Legislature, has suggested she would abandon the GOP’s plan to earmark $600 million of the $1.2 billion from the state’s $10 billion general fund, which is under financial stress after growing less than 3 percent since 2000.

Whitmer may very well get the support of business groups like the Detroit Regional Chamber and Business Leaders for Michigan, which have opposed the Legislature’s move away from Michigan’s traditional method of funding roads with taxes on the cars and trucks that use and abuse the pavement.

“If the Republicans don’t deliver and are seen as overly obstructionist on fixing the roads, I think they’re going to be in for a tougher road in 2020 — and I think they realize that,” said Sandy Baruah, president and CEO of the Detroit Regional Chamber.

Baruah, a longtime Republican who served in both Bush administrations, said the GOP’s anti-tax message is “just not resonating with voters anymore.”

“If that’s the message they’re going to use to not fix the roads, I think that means political problems for the Michgian Republican Party in 2020,” Baruah said.

By ending the general fund raid for road dollars, Whitmer would free up money to help pay for two of her other campaign pledges — a $100 million scholarship program to pay for the first two years of college and stopping the so-called “raid” of $900 million in School Aid funds that helps subsidize the state’s universities and community colleges.

Both are going to be heavy legislative lifts, especially since Whitmer has vowed to eliminate the income tax on pension income for Baby Boomers — another $300 million hit to the general fund.

Her campaign wish list for the general fund easily tops $1.3 billion.

“She’s gonna have to put those much-vaunted legislative skills to work,” Baruah said.

There are Republican legislators eager to get rid of the tax on pensions — and they would have done it by now if it weren’t for Snyder’s ability to veto such a tax cut.

“I think no matter who controls the Legislature, that’s coming to the desk,” Whitmer told Crain’s on the campaign trail in late September.

During the campaign, Whitmer said she’ll present lawmakers with a budget plan by February that funds her $3 billion plan to fix the roads.

That will inevitably include a proposed tax and fee increase for road users.

If the new Republican leaders refuse to go along with a tax hike, Whitmer has said she’ll mount a ballot campaign for a $20 billion, 10-year bond for roads and infrastructure — a get-out-the-damn-credit-card approach.

“If they’re not strong enough to do it, I’ve always said I’ll go to the voters and go for a bond,” the governor-elect said Wednesday.

All of this political wrangling will put the years-long road funding debate back in the spotlight in February, March and April — just in time for another pothole season.

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