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Michigan Legislative Update

Week of June 5, 2015

by Judy Augenstein

House Speaker Kevin Cotter's plan to get to $1.05 billion for roads through mostly re-prioritizing  General Fund dollars was approved this week by the special House Roads and Economic Development Committee and is now receiving debate by the full House.  The plan is the first significant action legislators have taken this session since voters rejected a ballot proposal in May that would have increased the sales tax to improve Michigan's roads.

Roads Committee Chair, Rep. Jeff Farrington, R-Utica,  predicts the package, which is criticized by Democrats, would make it through the full House.  The Chair predicts that a major part of the package would eventually become law.  All five Republicans on the committee voted for each of the 12 bills giving the package enough support to advance to the House floor.  The panel's two Democrats, Rep. Scott Dianda, D-Calumet and Rep. Marilyn Lane, D-Fraser, voted against 11 of the 12 bills.  Democrats contend that the plan is not really a plan because it relies on state resources that may or may not be truly available four years from now.

Over a four year period, Cotter's plan would phase in $1 billion in additional revenue for roads.  Over that time, the plan would dedicate more than $700 million in extra funding that is expected to exist in the state's budget to transportation.  The plan shifts $185 million from economic development programs to roads, which is the most controversial part among some House Republicans and is expected to be the toughest lift in the full House.  Another controversial element would eliminate the state's Earned Income Tax Credit (ETIC) to free up $117 million. 

The only bill Democrats voted for involved new requirements for warranties for construction projects.  Rep. Scott Dianda won an amendment to that bill which would decrease the cap on MDOT's administrative costs from 10% to 7%.  The package would raise the tax on diesel fuel from 15 cents to 19 cents to match the tax on regular gasoline and expected to raise $39 million.  Registration fees for electric and hybrid vehicles also would be increased.  The farm/log plate registration fees would remain the same.  Other bills would require competitive bidding for projects and one bill would dedicate some sales tax revenue from gasoline sales to transportation. 

All other major issues are on hold in the House until the roads package completes action.  Speaker Kevin Cotter plans to dedicate every session day next week towards passage of the road plan.

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