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City leaders are down on roads funding package

By: Kevin Bunch | Roseville - Eastpointe Eastsider | Published November 17, 2015

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LANSING — While Gov. Rick Snyder and members of the state Legislature seem pleased with the road funding package signed into law Nov. 10, local leaders are cynical regarding whether it will provide any helpful financing to deal with crumbling infrastructure.

Under the new law, road funding would increase each year between 2017 and 2021, starting at an additional $452 million in 2017 and ending at $1.2 billion. Starting in 2022, the gas tax would also be tied to inflation so that regular increases in revenues could be maintained. Mass transit systems also would receive a small bump totaling $54 million in 2021.

Roughly $600 million would come in the form of increases in registration fees and in the gas and diesel taxes starting Jan. 1, 2017 — the gas taxes would be increased to 26.3 cents per gallon, and registration fees would be increased by 20 percent. The remaining $600 million would come from unspecified cuts to the state’s general fund budget starting in 2019. The new law also would bring tax benefits to residents in the form of increasing the homestead property tax credit’s maximum amount and a potential income tax rollback starting in 2023.

“The plan approved today includes new revenue generated by people and businesses using the roads — including nonresidents,” Snyder said in a statement. “It helps with public transportation that is vital for many to get to work and school. And it’s good for our economy, strengthening the network of local, state and federal roads that is vital for all our job creators.”

Snyder previously was opposed to dipping into the general fund to help finance roads, but he said the new law would provide a “long-term solution” to the state’s transportation woes that should make roads safer for drivers long into the future. 

Local officials were skeptical at the news.

Roseville City Manager Scott Adkins said he was glad that something was passed, but that he still had reservations and concerns when it came to those unspecified general fund cuts. He said that those cuts could end up coming from the Act 51 fund, where the state shares revenues with municipalities; in exchange, those municipalities are limited in how much money they can tax locally.

“We don’t want to see that formula change to where it adversely affects local municipalities,” Adkins said. “It is unfortunate that most of this won’t ratchet in for quite some time. I know we won’t see an immediate effect, so we have to (wait to) see for several years — and I hate to use a pun — if it fills the holes in the funding.”

Until 2017, he added, the city would be stuck with its current road funding levels.

Eastpointe City Manager Steve Duchane shared Adkins’ concerns about changes to local funding, as there are only so many places in the general fund where the state could carve out the $600 million.

“They’re all ones related to local government, education or other services,” Duchane said. “I think it’s clearly a very disingenuous attempt to say some road funding will be done. And these people (in the Legislature) will all be gone by the time any of this happens anyway, because of term limits.”

He said he does not think the roads funding package realistically solves the road funding problem and is more of a “sham show” to make it look like the Legislature did something to fix the roads. Duchane added that he estimated Eastpointe would receive an additional $500,000 a year when fully implemented; for comparison, the city currently budgets $4.4 million to fix roads, and with construction costs on the rise, he does not expect that new revenue to go far.

Michigan House Democratic Leader Tim Greimel, D-Auburn Hills, blasted the plan after it was passed, expressing concern that the general fund money would come from state programs like public safety, schools and health care while also giving the wealthiest residents an income tax break from the rollback. 

“It’s obvious this plan was made to cater to the wealthy friends of Michigan Republicans, not the average working people who drive on crumbling roads to get to work every day,” Greimel said.

Not every group is dismissive of the funding package, though — the Michigan Infrastructure & Transportation Association, which represents construction workers, issued a statement praising the plan, saying that while it would have liked to see additional funding start coming in sooner, the plan is a positive step forward and good for the industry.

The Michigan Chamber of Commerce also supported the plan, with Chamber President Richard Studly in a statement calling it a “fair and balanced” approach toward road funding.

“It is a good plan, not perfect, but the best GOP lawmakers and the Snyder administration could do given a lack of support from organized labor and opposition from all but one or two Democratic lawmakers,” Studly said in his statement.

Michigan House Republican Leader Kevin Cotter, R-Mt. Pleasant, said in a statement that talks for a road funding package had reached an impasse in October because “everyone was so bound to their own preferred solution.” Both the Michigan House and Senate then had to approve a plan that neither was pleased with.

“This is the compromise that fixes our crumbling roads, meets in the middle and covers almost every priority the House, Senate and governor all said they wanted in a plan,” Cotter said.

The road funding bills were passed practically along party lines in both the House and Senate, with a 20-18 margin in the Senate and a 55-52 margin in the House on the fuel tax increase, and 54-53 in the House on the registration fee increase.