• Michigan: Voters Reject Ballot Measure to Fix “The Sorry State of the Roads”
  • May 29, 2015 | Authors: David H. Godenswager; David M. Kall; Susan Millradt McGlone
  • Law Firm: McDonald Hopkins LLC - Cleveland Office
  • Michigan lawmakers voted to utilize a different mechanism to address the state’s desperately needed infrastructure funding: A ballot proposal. However, Michigan voters last week rejected Proposal 1 (Prop 1), which would have increased fuel taxes while removing the sales and use tax from fuel sales and would have increased the sales tax on non-fuel items from six percent to seven percent.

    The Detroit News described the rejection as “the worst smackdown in decades...a thumping... an old-fashioned shellacking by the voters.”

    It should be noted that despite the colorful language used to describe the defeat, and the fact that 80 percent of voters rejected Prop 1, a dismal percentage of the electorate actually cared enough to vote. The Detroit Free Press acknowledged that the rainy day depressed what was already a very low expectation for voter turnout, just 20 percent.

    In discussing the measure, the paper reported that the $10 million special election could have raised about $1.3 billion extra for roads, $200 million a year more for schools, $116 million for transit and rail, $111 million more for local governments, and given a $260 million tax break to low and moderate income families through restoration of the Earned Income Tax Credit (EITC). However, it was “likely one of the most complicated and confusing questions ever placed on a Michigan ballot...many voters expressed anger at lawmakers and state government for failing to come up with a better solution to the sorry state of the roads.”

    The Detroit Free Press’s description of the source of the complications highlights the problem with the ballot language:

    The complex nature of the proposal resulted from the need to replace school and local government revenues lost as a result of removing the sales tax from fuel sales to make room for higher fuel taxes, which unlike sales taxes, support roads and transportation. Features such as the restoration of the EITC were concessions to Democrats, whose votes Republican [Governor] Snyder needed to get the plan through the Legislature.

    Supporters like the MLive Media Group Editorial Board (Editorial Board) observed that “it is time to pay the piper.” They backed Prop 1 because of its promise of better roads without harming schools and cities. The Editorial Board stressed that “any proposal to fund road improvements without raising taxes will likely result in big losses for schools and cities. There isn't anywhere else in the budget that would provide the kind of money our roads need.”

    In its Transportation Reality Check, the Michigan Department of Transportation (MDOT) divulged that the taxes that fund transportation infrastructure are among the lowest in the country, and that the “road conditions reflect that level of investment.” In fact, neighboring Ohio spends $1 billion more per year on roads. “Michigan's transportation system is hurting, and waiting just makes things worse.”