(The Center Square) – With a road fiscal cliff approaching, funding local and county roads without raising taxes is Republicans’ top priority during the lame-duck session and going into the new year, Speaker-elect Matt Hall, R-Richland Township, said at a news conference.
“There’s been no money that’s been going into our local roads – our local roads are in disrepair,” Hall said. “State revenue has exploded in recent years and so has government spending. But what do we have to show for it? Politicians spending billions of dollars every year on new projects and new programs, and then they turn around and say they have no money available for our local roads.”
To remedy the issue, Hall outlined a plan crafted by Michigan Republicans that would restructure state budgeting to support local infrastructure.
The plan would immediately dedicate $1.2 billion of annual corporate income tax revenue for road-related infrastructure, with the most resources going to local road agencies, rather than allocating the money to large companies like GM as corporate incentives.
It would also allocate the additional $600 million in CIT funding during the Fiscal Year 2025-2026, which currently supports the soon to expire Strategic Outreach and Attraction Reserve Fund, the Revitalization and Placemaking Fund, and the Housing and Community Development Fund.
Republicans say the end of automatic SOAR funding would force the governor and others to make a stronger, evidence-backed case for new incentive funding, pointing to recent projects, such as boosted electric vehicle manufacturing–that have cost billions of dollars and created much fewer jobs than projected.
The second element of the plan involves replacing the 6% sales tax on gas with a revenue-neutral increase in the gas tax, and exclusively dedicating all of the money generated to infrastructure funding, resulting in an additional $945 million in local road funding.
Hall and state Rep. Tom Kunse, R-Clare, repeatedly emphasized that the plan is revenue-neutral and will not cut school aid, which is up 60% over the past ten years.
“[The plan is] going to raise the gas tax, but we’re going to lower the sales tax an equivalent amount so we are not raising–this is revenue-neutral,” Kunse said. “So even though there’s going to be an adjustment, it’s not a new tax.”
Hall added that the plan will require support from Democrats and that he is “open to negotiations” regarding implementation details.
“I’m hopeful they’ll embrace our plan,” Hall said. “And you know, their criticism sharpens it and makes it better, and we could come up with something really good for the people of Michigan.”
