Michigan Legislative Update
Week of May 28, 2015
by Judy Augenstein
This week the House Roads and Economic Development Committee met to further debate the 12 bill road package introduced by House Republicans. The committee took testimony on a bill to shift $75 million in tobacco settlement revenue, which is currently going to the 21st Jobs Trust Fund, to the Transportation Fund and another bill to shift $60 million from Native American gaming compacts which currently goes to the MEDC, but would be re-dedicated to roads. Steve Arwood, CEO, Michigan Economic Development Corp (MEDC) testified against the bills as they would shift $185 million from economic development efforts. "The impact would be all across the state, argued Arwood. Legislators seemed less than convinced of the alleged repercussions with one saying that economic developers were using "scare tactics".
Rep. Marilyn Lane, D-Fraser suggested the MEDC temporarily change its entire focus to transportation. The main argument Republican legislators made in committee was that over the last few years, the legislature has taken major steps to make Michigan more attractive to business and now the state needs some help with another priority, improving roads. Rep. Pete Pettalia, R-Presque Isle, VC of the special committee commented that, "now we are asking for some help." We want to make Michigan a better place do do business in." But for over two hours both state and local economic development officials, along with representatives from the business community argued that by shifting dollars away from economic development, the state would hurt its chances to attract jobs.
According to multiple estimates, Michigan needs more than $1 billion per year annually in additional funding for its transportation infrastructure. Earlier this month, voters rejected a plan to raise that money through increasing the sales tax, so legislators are now looking for a new solution.
Two other bills discussed by the committee was whether registration fees should be increased for electric and hybrid vehicles. Opposition for the bills came from the Ecology Center. A spokesman commented that owners of hybrids and electric vehicles already pay more because of the overall cost of purchasing new vehicles. Rep. Pettalia responded that, "your outlook on this is trying to protect a class of citizen that can afford a more expensive car at the expense of somebody who cannot". The last few minutes of the meeting were spent on explaining bills to increase the diesel fuel tax to 19 cents per gallon on October 1, 2015 and adjust the tax for inflation or by 5 percent, whichever is less, beginning in 2016. The changes would generate $40 million in new revenue. The farm plate/log plate are not up for debate or elimination at this point. Next week the committee will discuss legislation to eliminate the Earned Income Tax Credit. A vote on the 12 bill Republican package "may" be taken next week.
The House and Senate conference committee on Transportation voted this week to dedicate $400 million from the General Fund to the Transportation Fund. The House deleted the $50 million for film credits last week, but the Senate reinstated $25 million of it this week and then the conference committee wiped most of that out this week for another program. The House road plan so far has been to take monies from all departments and to not raise taxes. The Senate GOP has not revealed their road funding plan. House and Senate Democrats could announce their road funding plan next week.
This week SB 217, sponsored by Senator Darwin Booher, R-Evart was reported out of the House Natural Resources Committee and is awaiting second reading by the full House. Qualified forest and qualified agriculture would be allowed on the same land under the bill. Both programs exempt the property from the 18 mills of state school property tax, but supporters of the bill said current law requires that each activity be on a separate parcel, meaning owners wanting both have to create separate deeds for each area.
The DNR budget conference committee was finalized this week and includes $8 million for strategic investments in forestry technology and equipment. Governor Snyder recommended $ 4 million, but the Senate increased the line item to $8 million which the conference committee concurred. Governor Rick Snyder deleted the line item to require DNR to mark and prescribe treatment on 79,000 acres of timber and to prepare harvest of 67,500 acres, but the House, Senate and conference committee reinstated the line item. The budget bill, HB 4091, also provides monies to hire sufficient contract foresters to mark timber which was deleted in the Governor's budget request.