LANSING – Governor Rick Snyder and Senate Majority Leader Randy Richardville on Monday offered a different assessment from Michigan House Speaker Jase Bolger’s continued claims that others in the room discussing a solution to the state’s $1.2 billion road funding problem have shown little interest in finding a compromise.
The development is the latest in the he-said-she-said that has consumed discussions about whether this Legislature will be able to reach an agreement on how best to fund and fix the state’s crumbling infrastructure. And in that discussion, it has appeared – at least in the last week or so – that Bolger (R-Marshall) has been the lone dissenter when it comes to agreeing on both the funding method and whether $1.2 billion is in fact the right number to be looking at in terms of new revenue.
The Senate passed a funding solution (HB 5477 ) that eventually would raise the gasoline tax to 15.5 percent, and Snyder has urged the House to pass that plan. But Bolger maintained on Monday that he and his caucus do not see the need to raise taxes to help fund the state’s crumbling roads.
The House version of the bill would set a new percentage-based gasoline tax, like the Senate plan, but instead finalize the rate at 13.5 percent. However, the House also passed a bill to remove the sales tax from gasoline (HB 4539 ), meaning a revenue-neutral plan overall, but one that would pull more than a billion out of the School Aid Fund and revenue sharing to local governments, as chunks of money to the General Fund and public transit.
“We’re not doing a $1.2 billion tax increase,” Bolger sharply told reporters after a quadrant meeting on Monday. “I’ve said that I’m willing to step forward (from nothing) and I haven’t seen yet a proposal that steps backwards that would reach agreement. It takes two to compromise, and while I’m ready to compromise, it will take all parties to come to the table and make sure they’re willing to compromise.”
Asked if, for him, the agreement would need to come down from $1.2 billion in new revenue or have nothing at all, he said, “The House proved you can fix the roads without a tax increase. Others have said you need a $1.2 billion tax increase. There’s a lot of space between zero and $1.2 (billion), but a compromise would mean that it’s between zero and $1.2 (billion).”
Snyder and Richardville (R-Monroe) on Monday both seemed to disagree with Bolger’s statements about the level of compromise in the room.
Snyder, speaking to Gongwer News Service, was careful not to overtly debate Mr. Bolger about whether others have shown willingness to compromise, but also made it clear that everyone has been willing to give.
“I’m not sure when the speaker said that, but I think there’s been constructive discussions going on that involve some degree of compromise by everybody,” he said. “That’s part of this process. You always wish you could get everything you wanted, but quite often in this particular case, I think there is a range for good outcomes that involve compromise by everybody in the room.”
Richardville also appeared befuddled by Bolger’s allegation.
“I don’t know why he would say that. I guess I would see it differently,” he told reporters after session. “It doesn’t really matter a whole lot to me what people are willing to go down to or come up to. The people that study this said it’s a minimum $1.2 billion problem. So negotiating away from that means you’re just going to let the problem exacerbate. So why would we do that? If we’re going to do that, if we’re going to take a hard vote, we want to do it the right way.”
One concern about shifting away from the Senate plan, which is relatively simple in that it raises the $1.2 billion with one vote and no other major components, is adding on layers and other bills.
Bolger’s counter plan requires not only voting to increase the gasoline tax, but also a vote to take the sales tax off of gasoline. For that to have any chance of winning Democratic support, a third bill with an as-yet unknown mechanism would be necessary backfilling lost revenue to the School Aid Fund and for revenue sharing aid to local governments as a result of taking the sales tax off of gasoline.
“If you add too much complexity, it could fall apart,” Snyder said. “As you introduce new elements, when you only have three or four days to get something done, it’s harder for people to make an assessment of how they view it coming together. The complexity makes it more challenging when you have very little time for people to make decisions.”
Richardville agreed that the complexity makes things difficult, but admitted that the Senate plan is not quite perfect.
“I know that what we passed takes care of the funding problem, but there’s still some structural issues I wouldn’t be happy about,” Richardville said. “The six cents (per dollar) at the pump is continuing to go to school and local governments, and eventually the gas tax is going to be really high compared to others. If nothing else, it bought some time to come up with a better solution after they fix those other problems.”
And House Minority Leader Tim Greimel (D-Auburn Hills), speaking to reporters after the Quadrant meeting, agreed the Senate plan was the “most straight-forward plan.”
“I think the political reality is such that it’s the simplest, most straight-forward plan and therefore probably has the highest likelihood of passing and becoming law,” he said when asked about whether he fully embraces the Senate’s plan.
Senate Minority Leader Gretchen Whitmer (D-East Lansing) added, “I think the wisdom of the Senate plan is that it was a bipartisan plan that can be done through the Legislature and just the Legislature. It will go into effect immediately and start putting money right into the roads.”
THE POTENTIAL COMPROMISE: Sources familiar with the discussions have said Bolger is looking to take a vote on a limited sales tax on transportation services; use revenue from the so-called Main Street Fairness legislation (SB 658 and SB 659 ), which collects sales tax on all purchases made online if that retailer has a nexus in the state; and perhaps pass a gas tax increase that is not as large as the one passed by the Senate.
Asked about those options, Bolger denied that the tax on services was his idea, but said he’s been open to including that option. As for the gas tax increase, he said, “I’ve said I’m open to additional revenue. However, we need to minimize that and we need to make sure that gas prices do not become uncompetitive.”
But Bolger would not say what number he is confident he could sell to his caucus, either.
Richardville has been hesitant about the idea of a service tax, noting Monday that if one were to be “thrown out the way it was in 2007,” it would be “more than a poison pill.”
Michigan enacted a sales tax on services in 2007, but that was quickly repealed.
And on Monday evening, the Michigan Chamber of Commerce, a strong backer of more money for roads, sent out an action alert to its members urging them to call Snyder and legislators to ensure the defeat of any such tax idea.
“This ill-conceived scheme would cause great damage by unfairly picking winners and losers depending on the political whims of politicians,” the alert said. “This threat is real. HB 4539 … has been identified as a main bill in the road funding plan, and appears to be the most likely bill to be hijacked for a sales tax on services – but other bills can always be in play.”
OTHER RESOLUTIONS, THE “DROP-DEAD” DATE: Sources familiar with the discussions say one of the issues that all leaders seem to agree on is how to ensure that people who do not drive cars or who drive hybrid vehicles, for instance, also pay their fair share. To that end, Snyder’s proposal on increasing registration fees is still in circulation despite legislative uproar over the idea every time it has been introduced.
In fact, a bill on registration fees (HB 4630 ) has been sent to a conference committee along with the other road bills, HB 4539 and HB 5477. And Richardville maintained that anything is on the table, though there is no clear indication of when those conference committees could meet, or if they will meet at all.
“The thought was always whatever we needed to get into a conference committee, but bills that were in either chamber and could be used for vehicles or ideas that hadn’t been completed yet can still be part of the mix,” Richardville said.
This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
