Why I'm voting yes today on Proposal 1

After much deliberation, I've decided to vote yes on Proposal 1 tomorrow. Doing what we can to address the road crisis as soon as possible is more fiscally responsible than leaving it, even though the plan is poorly thought out and insufficient.

There's no question we have a crisis. 

However, to be clear, what Proposal 1 won't do is raise enough money to fix the state's roads. At the beginning of Snyder's first term, the yearly shortfall was 1.2 billion, and that's about what this proposal will raise for our roads. The multi-year delay means that the actual yearly shortfall is now 2.8 billion , according to Michigan's Roads and Bridges Annual Report as well as other sources. So if this passes, we will still have a 1.6 billion dollar shortfall. However, if this doesn't pass, we will have a 2.8 billion dollar shortfall, and expenses will increase faster than if there is some maintenance taking place. How the legislature will come back and ask for this money later, I don't know (and many of the legislators responsible for this mess will be term limited out before this bill comes due - another reason to end term limits).

Proposal 1 will raise enough money so that forward looking cities like Grand Rapids can begin to catch up on their road maintenance. We really are relying on the State to get their house in order. We need the extra funding at a local level.

The compromises that the Democrats forced are actually good for citizens, and proven measures that will help build our economy (4). They should have been implemented a long time ago, but have been opposed by the Republicans.

Here's a summary of those measures from the Detroit Free Press:

"If Proposal 1 passes, the largest share of the new sales tax revenue — about $290 million — would go to the School Aid Fund that supports K-12 schools. New restrictions contained in Proposal 1 would bar the diversion of school aid money to colleges and universities but allow the state to spend some of it on the career education programs that the Snyder administration wants to expand.

Another $111 million would be earmarked for constitutionally mandated revenue-sharing to cities, townships and villages. This is not pork, but rather the crucial funding most municipalities have increasingly relied on to keep police protection, fire-fighting and other basic local services afloat in recent years as property tax revenues plunged.

Public transit, which would be funded by the fuel tax going forward, would lose about $14 million in sales tax revenue, but would get a much-needed $116-million boost from the higher fuel tax.

Also the restoration of the earned income tax credit is good, and can help stimulate the economy (unlike tax cuts for business)

Meanwhile, $260 million will eventually be allocated to restore the Earned Income Tax Credit for Michigan's poorest working families to its pre-recession level.

The EITC has always been a bargain for Michigan, because the families who qualify for it tend to return the money quickly to the local economy. And it makes especially good sense in the context of Proposal 1, whose fuel and sales tax increases will be borne disproportionately by the Michigan's poorest residents."

My concerns are the following:

I don't like that the tax plan is not forward looking or creative in any way. It doesn't address the fact that cars are becoming more efficient and that people are driving fewer miles per capita. I'd prefer something like vehicle miles travelled or ton miles travelled. The amount collected by this tax will gradually drop unless we start driving more, or our population expands (but even then may drop in per capita collections).

It isn't clear how much goes to new construction and how much to repair. In general, we shouldn't be building new roads that we can't maintain. The Michigan Department of Transportation (MDOT) is not good at planning or working with communities, and spends money poorly.

It doesn't force truck weight limits down, and of all the states, Michigan allows the heaviest maximum truck weight on our roads.

We gave businesses a billion plus dollar tax cut that has had no effect on jobs. Michigan ranks 49th (out of 51, including Washington, D.C.) in the percentage of state and local taxes paid by business. Only 35.8 percent of state and local taxes is Michigan is paid by business. The national average is 45.2 percent.

It may allow the state to give the schools less of the sales tax money than the current appropriation percentage.

And the vehicle registration fee becomes a tax and thus non-deductible. This is a minor annoyance, but there it is.

Despite my concerns, and despite the Proposal still not completey alleviating our road infrastructure problem, I'm still voting yes on Proposal 1 today in the polls.

Now it's your turn. Do your own research, make your decision and head to the polls.