Nick Krieger (@nckrieger):
To fix Michigan's roads, we need to raise some additional revenue. It's that simple. Most people don't want to pay for another costly statewide election (about $10 million), which would be required to amend the Michigan Constitution to alter the sales tax or implement a graduated income tax. So what are the other options?
Of the current 19-cents-per-gallon state excise tax on gasoline (15-cents-per-gallon on diesel), 90% already goes to roads/bridges and the other 10% goes to other transportation purposes. This is guaranteed by the Michigan Constitution. Of course, we also pay 6 cents on every dollar of fuel (state sales tax) and none of this money goes to the roads. Among other things, Proposal 1 would have changed this. On top of these state taxes, we pay an additional federal gasoline tax of 18.4 cents per gallon (24.4 cents per gallon of diesel) which goes primarily to the Federal Highway Trust Fund. That is why I have proposed raising the state gasoline tax by 10 cents only. I think anything more than this would be overly burdensome. I also think that implementing a use tax on certain services would be the least painful way to raise the remaining funds. Michiganians already pay a 6 percent sales tax on most goods, and the entire purpose of the use tax is to complement the sales tax. What's more, many of the services that would be taxed (i.e., consulting services, personal-shopping services, landscaping, interior design, etc.) are primarily purchased by higher-income individuals who can afford to pay a 6 percent use tax.
People say that the Legislature should tighten its belt and make cuts. That's fine with me. I totally agree. But what, exactly, should the Legislature cut? Michigan already spends fewer tax dollars on universities/higher education than many other states. And I just can't support any further cuts to K-12. This leaves corrections/prison expenditures as the logical choice, since they account for 20% of the state's total budget. In fact, as of 2013, Michigan devoted more of its General Fund dollars to prisons than any other state. Last term, there were several Republican state legislators who wanted to have a serious conversation about prison/sentencing reform with an eye toward saving money. But our "tough-on-crime" Attorney General Bill Schuette essentially made sure that no such conversation ever took place. If we want state government to work for us, we have to get serious about real reform. Too many of our legislators are afraid to do what's right.
It would be difficult, by anyone's definition, to find an extra $1.2 billion through cuts alone. Consider this: The federal government now requires the state to spend far more than it ever had to spend in the past. For instance, standardized testing is required, at least in large part, by the federal government—not the state. It costs Michigan millions. And what about Medicaid? Medicaid costs the state of Michigan hundreds of millions of dollars every year. And it wasn't even an issue when Michigan's Constitution was ratified in 1963. While these are only two small examples, it is clear that the Legislature simply doesn't have the broad freedom to shift unrestricted dollars from one program to another that it once did.
And yes, there are other ways to save money and make cuts. Unfortunately, however, many Michigan residents do not even want to consider them. For instance, the Michigan Legislature could force school districts to consolidate, establish countywide school systems, eliminate county road commissions, centralize all transportation services with MDOT, and take over the funding and operations of all circuit, probate, and district courts. On top of that, the people could amend the state constitution to eliminate all township and village government. These changes would save hundreds of millions of dollars per year. But, thus far, the people have expressed no appetite for these changes. Indeed, it seems that most Michigan taxpayers continue to support our quaint, nineteenth-century system of "local control," even though it has cost them dearly. We just can't have it both ways, folks. We need to either raise the revenue or make the unpopular choices. It's all about priorities.