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Business groups, governor turn up pressure on road funding

From: Crain’s Detroit Business

By Lindsay Vanhulle

October 22, 2015

LANSING — Business groups and even Gov. Rick Snyder are turning up the pressure on state lawmakers to go back to the table and pass a road-funding deal.

Nearly six months ago, statewide voters told Snyder and lawmakers virtually the same thing when they trounced a ballot proposal meant to pay for road work through higher sales and fuel taxes.

Yet spring turned into summer, which turned into fall, and top House and Senate leaders haven’t been able to compromise on any deal that would fix the state’s roads and bridges.

“I thought it was pretty close,” Snyder said this week during a meeting with Crain’s reporters and editors. “We had a pretty rational package all put together.”

But, he said, politics got in the way. So last week he called off any future meetings with the leadership “quadrant” — House Speaker Kevin Cotter, Senate Majority Leader Arlan Meekhof, House Democratic Leader Tim Greimel and Senate Minority Leader Jim Ananich — unless someone becomes willing to move.

And, the governor hinted: The impasse is “a great opportunity for the public to step up and say get something done.”

Groups from the Detroit Regional Chamber to Business Leaders for Michigan are calling for legislative leaders to approve a reported compromise plan, calling it “imperfect” but the best option to end the stalemate.

House and Senate Republicans have been split on how much new revenue to take in through raising the fuel tax or vehicle registration fees and how much existing spending to divert from the general fund. A reported compromise would include $800 million in new revenue and $400 million in current spending, along with an income tax rollback provision first introduced in the Senate. The House was to vote on a new plan Wednesday night that would raise $1.2 billion a year for roads, but not until the 2020-21 fiscal year. The 19-cents-a-gallon state gasoline tax would be increased by 3.3 cents in 2018. The 15-cent diesel tax would rise by 7.3 cents in 2017. License plate fees would increase by an average of $55 per vehicle annually starting in 2016.

At least $1.2 billion is needed to maintain Michigan’s infrastructure. The state’s 19-cent gasoline tax hasn’t been raised since 1997, nor is it tied to inflation, so it no longer generates enough revenue to match Michigan’s annual share of federal transportation dollars.

“The reported ‘last, best deal’ reflects a compromise that, while imperfect to all parties, would finally bring an end to this saga and give Michigan motorists and businesses the transportation infrastructure they deserve,” Detroit chamber President and CEO Sandy Baruah and Brad Williams, its government relations vice president, wrote in a letter to lawmakers.

“The failure to act decisively has already cost Michigan motorists four construction seasons since Governor Snyder first called on the Legislature to act,” they wrote. “Increasingly, citizens from all walks of life, along with business owners and leaders, see the Legislature’s inability to find common ground on this issue as a failure of leadership.”

The Detroit chamber, Business Leaders for Michigan — a coalition of the state’s largest employers — and the Michigan Municipal League all warn against the use of more than $400 million in general fund revenues.

They and outside policy analysts have cited looming fiscal pressures, including the funding of the state’s Healthy Michigan Medicaid expansion, as reason to be cautious when raiding the state’s coffers.

Gideon D’Assandro, a spokesman for Cotter, said the House doesn’t plan to move the Senate’s road-funding bills out of a conference committee — where they’ve been since August — because there’s no compromise ready for a vote.

D’Assandro said Cotter has met privately with the governor to discuss roads and remains open to a solution, but no future quadrant meetings are scheduled.

“We’re still going to continue to work it, but it was to the point where people were at a position of just disagreeing,” Snyder said. “I’m not going to give up on this.”