Michigan Senate, stuck at standstill, considers changes to House road funding plan

A divided Michigan Senate failed to vote Tuesday on a $1.2 billion road-spending plan after majority Republicans opposed a House-approved 40 percent hike in vehicle registration fees in 2016.

The House last week sent the Senate a nine-bill road funding package, the latest attempt by lawmakers to piece together a long-term financial plan for preventing Michigan’s road conditions from worsening.

The issue: House Republicans prefer a heavier reliance on vehicle registrations combined with 3.3-cent gasoline and 7.3-cent diesel tax increases.

But Sen. Mike Green said he’s not likely to vote on the plan.

Shift $600 million from the general fund into roads, which would be phased in beginning in 2019. One thing it’s looking at is setting aside $100 million for future road projects once better materials are available.

“I think this plan raises their taxes, makes serious cuts to the budget, and still doesn’t fix our roads”. The hike, which would begin October 1, 2016, would increase that to $140.

The initiative would raise an added $400 million for roads when started in the 2017 budget year but could boost funding by even more than $1.2 billion after 2021 because of a built-in inflation factor allowing automatic fuel tax increases.

Three hours into the Republican-controlled chamber’s session, the legislation didn’t have the support it would need to pass. The bills were expected to be similar to a proposal that House Republicans passed last week over Democrats’ objections. The average registration fee for a passenger vehicle is $100.

– an expanded homestead property tax credit, so those earning up to $60,000 are eligible – above the current $50,000 limit – and the maximum credit rises from $1,200 to $1,500 and is indexed to inflation.

General fund revenues, which pay for health care, welfare, prisons, universities, aid to local governments and other services, would decline by $806 million in the fifth year, and less than that in earlier years.

The tax increases are tied to two tax relief components otherwise unrelated to roads: an expansion of the Homestead Property Tax Credit and a potential rollback of the personal income tax rate in later years.