Michigan Farm Bureau is rallying support for a ballot proposal that would raise more money for road and bridge repairs. But there's one catch: It involves a tax increase.
On May 5, Michigan voters will be asked to voice their opinion on Proposal 1. A "yes" vote would increase the state sales tax from 6 percent to 7 percent on non-fuel items and generate additional revenue for transportation infrastructure.
If passed, Proposal 1 would change the formula for allocation of gas tax revenues, collecting 100 percent of the money, instead of just two-thirds, for road and bridge repairs. The Farm Bureau says this formula change would generate $1.3 billion in additional revenue for transportation infrastructure.
Currently, one-third of gas tax revenues are diverted to schools and local government.
The penny increase in the state sales tax would provide an additional $300 million for schools and $94 million for local governments, replacing the lost revenue from the gas tax.
At a Farm Bureau-sponsored breakfast event last Friday in Berrien Springs, area lawmakers, including state Sen. John Proos and State Reps. Al Pscholka and Dave Pagel, all Republicans, expressed support for the proposal.
Pscholka, who serves as chairman of the House Appropriations Committee, pointed out that Michigan roads are in poor shape, with just 17 percent of them rated in "good" condition. He said fixing those roads is a $15 to $20 billion expense and can't be financed by reallocating dollars from one area of the budget to another.
He said Proposal 1 is a long-term solution.
Proos, of St. Joseph, and Pagel, a fruit grower from Berrien Springs, both agreed, pointing out that lawmakers have cut as much as possible from the budget.
"There's not a lot of low hanging fruit left," Pagel said.
Matt Kapp, MFB government relations specialist, said Proposal 1 also includes a registration fee increase for commercial trucks, as well as for hybrid and electric cars that do not consume fuel.
However, the proposal does not include any fee or tax increases for farmers.
"Agriculture remains exempt from the state sales tax. That's very important," he said.
Kapp said Michigan's new sales tax, if voters approve Proposal 1, would be in line with other Midwest states, including Indiana, which has a 7 percent sales tax.
Proos said roads are a big priority, and if Proposal 1 fails, lawmakers will come back with alternative plan to fund highway projects.
On federal issues, U.S. Rep. Fred Upton (R-6th) said the House of Representatives last Thursday voted to repeal the estate tax, "in large part because of the Farm Bureau." However, he said the margin is not enough to override an expected veto from the president.
He also co-sponsored a bill targeting the Environmental Protection Agency's navigable waters regulation, along with a rider that strips EPA of its funding for this regulation.
Upton said there is bipartisan support for GMO labeling standards. He said this approach, with one set of rules, is better than having 50 different standards from each state.