And unless you live in East Lansing, Lansing Township or the school districts of Holt, Williamston or Webberville, there´s nothing else on the ballot.
So what the heck is it?
Well, it´s as simple or complex as you want to make it.
Here´s the simple story. We´d be paying 1 cent more for every dollar purchase we make. If it´s a $20 purchase, it´s about 20 cents more; $50 purchase, 50 cents more; $100, $1 more, etc. It also raises the cost of a fill-up about $1.50.
In exchange, you´ll see eventually see more road construction crews repaving the state´s most destroyed local streets instead of filling potholes with asphalt every spring.
Your local public school will see between 2.5 and 3 percent more money from the state … not enough to see drastic changes but enough to stop bad drastic changes from happening as quickly or at all.
If your family is scraping by on around $25,000 a year, you´ll pay a few hundred less in income tax.
Want something more complicated? Here you go.
According to the Citizens Research Council, this is how Proposal 1 raises more money:
• It raises the sales tax a penny to bring in nearly $1.5 billion. It stops the collection of sales tax on gasoline, which saves drivers $690 million, for a net increase to the state of $795 million.
• The state´s gas tax goes from a flat 19 cents a gallon to a different formula determined by the wholesale rate of gasoline. Starting Oct. 1, it´s projected to go to 41.7 cents a gallon, but since drivers wouldn´t pay sales tax on gasoline, the increase wouldn´t be that dramatic.
Instead, drivers would pay 10.2 cents a gallon more if gas prices were around $2.50 a gallon. If the price is gas is around $3.101, the increase is around 6.6 cents more. And if gas is in the $3.830 range, the Research Council has the gas tax increase at 2.1 cents.
• Registration taxes on large commercial trucks go from $1,660 a year to $1,860 next year, $2,060 in 2017 and $2,260 in 2018.
• Driver registration fees will freeze. Currently, if you own a new car, your annual tabs declines slightly until your car is 4 years old (90 percent of your car value on its 2nd birthday, 81 percent on its 3rd birthday and 77 percent on its 4th birthday).
After Proposal 1, whatever you last paid the Secretary of State for your car´s annual tab is what you will pay going forward. So if you have a 2012 SUV with a list price of $30,500, you´ll continue to pay $112 a year. A 2014 SUV with the same list price will always be $138 a year.
• Renewing tabs for electric-powered cars would cost owners $75 more a year. "Partially-powered" electric cars would be $25 more.
Here is how the money is being spent:
• A combined $1.288 billion would be raised for roads next year, with around $800 million being spent to cover old, bonded-out road construction projects. By 2018, $1.392 billion more would be spent on roads. By comparison, the state currently raises $1.9 billion for road projects.
• As much as $390 million will go to schools. Currently, Michigan´s School Aid Budget is $11.89 billion, so it´s enough money to keep the schools open about five days. By comparison, the Michigan Lottery put $727.3 million into schools in 2013.
• Another $115 million goes to local governments, which sounds like a lot but the Michigan Municipal League says state cuts to locals has resulted in $6.2 billion lost to cities, townships and villages since 2001.
• Another $300 million is going to the state´s $9.5 billion General Fund, so 3 percent more.
•Counties would be required to award road projects through competitive bidding. The Michigan Department of Transportation, county road commissions and city road departments would have to have warranties for all pavement and reconstruction projects. County and local road departments would need to pass along heir warranty programs to MDOT for approval.
• $40 million will go to "at-risk schools"
• The state´s Earned Income Tax Credit will go to 20 percent of the federal rate. It´s currently at 6 percent.
—Kyle Melinn
Proposal 1 Q&A
Q. Why are we voting on this?
A. Michigan isn´t raising enough money to keep up its roads and hasn´t for years. Lawmakers and governors bonded and borrowed money to handle road projects, costs we´re all still paying for.
Gov. Rick Snyder doesn´t like borrowing money. Since taking office, he´s made a point to get a handle on outstanding debts and liabilities. In this case, he´s trying to create a sustainable, pay-as-you-go system for road repair expenses.
His initial plan was just to raise the gas tax the equivalent of about 20 cents a gallon, which the Republican-led House refused to do. Instead, conservative Republicans said if "the people" felt they wanted to pay more money to fix the roads, they should be given the opportunity.
From that simple concept came this complex proposal — the product of the good ol´ legislative sausage-making process. Whatever was needed to get this to pass was put into the proposal.
Q. What does a 1-cent increase in the sales tax mean to me?
A. Michigan doesn´t charge sales tax on groceries, prescription drugs and magazines, but it does for prepared food. If your Big Mac extra value menu says $6.09 on the menu board, you’ll pay $6.52 instead of $6.46, so 6 cents more.
That Calvin Klein jacket at Younkers on sale for $89.98 becomes $96.28 as opposed to $95.38, or 90 cents more.
A $429.88 40-inch Samsung TV at Sears will cost $459.97 as opposed to $455.67, or $4.30 more.
If your basic model 2015 Chevy Impala is $27,060, the state sales tax would be $1,894.20, instead of $1,623.60, $270.60 more.
Q. Does going from 6 to 7 percent give Michigan the region´s highest sales tax?
A. Yes and no. The answer isn´t that simple. Michigan and Indiana are the only Midwest states that don´t allow their cities to charge a separate sales tax. A 7 percent sales tax does tie Michigan with Indiana for the highest base state sales tax.
But there will be parts of Illinois (read Chicago), Iowa, Kansas, Minnesota Missouri, Nebraska, Pennsylvania and Ohio with a higher sales tax.
Wisconsin´s range of sales tax of 5 to 6.75 percent will be the region´s lowest.
Q. How do Michigan´s current driver registration fees/gas taxes compare with other states?
On driver registration fees, we´re roughly in the middle at 23rd highest. A 2008 analysis from the state of Idaho show that to register a 2007 Toyota Camry costs as low as $18 in South Carolina to as much as $941 in Rhode Island. It cost $116 in Michigan.
When state taxes on gasoline are mixed into the soup, Michigan is 31st highest at $229.08 a year for this Camry, ranging from $1,127 in Rhode Island to $112.50 in South Carolina.
Q. Is Proposal 1 regressive?
A. The sales tax is a regressive tax. Those who make $20,000 a year pay the same 35 cents on a $4.99 water gun at Five Below as someone who makes $80,000 a year.
To make up for this, Proposal 1 increases the Earned Income Tax Credit on the working poor´s state income tax from 6 percent of income to 20 percent. So while a sales tax is regressive, in the case of Proposal 1, the penalty is offset for those at the bottom of the economic ladder.
In order to claim the tax credit, a childless single person must make no more than $14,590 a year (married couple $20,020), according to the Internal Revenue Service. A single person with one child can´t make more than $38,511 (married couple $43,941). A single person with two children can´t make more than $43,756 ($49,186 married couple). A single person with three or more kids can´t make more than $46,997 ($52,427).
Q. Will I pay more because of Proposal 1?
Unless you qualify for the EITC, yes. If you do, you´ll likely pay less, but that´s not guaranteed depending on how much you make. The fewer automobiles you have, the better you make out because you´re not impacted by the registration or gas tax changes.
Economist Mitch Bean of Great Lakes Economic Consulting gives the following hypothetical examples:
• If your household earns $75,000 a year and you have two cars and you drive 20,000 miles per year at 22 mpg, you’ll see a tax increase of $312 a year.
• If your household earns $50,000 with two vehicles your taxes will go up $268 a year.
• If your household earns $30,000 and have two vehicles, your taxes go down $427 a year.
• If that $30,000 household had no cars, it would see a tax reduction of $609.
The free market-based Mackinac Center puts the tax increase for an average Michigan family at $525 a year.
Q. So all this $1.2 billion isn´t going for road projects next year or the year after?
A. No. It´s paying off a large chunk of the $1.9 billion Michigan still owes for Gov. John Engler´s Build Michigan road funding projects.
Starting Oct. 1, $860 million of the $1.288 billion will go into an escrow account to pay off bonds issued in the 1990s when they come due. In the fiscal year starting Oct. 1, 2016, $460 million, or a third of the new road funding will be put into fund.
As it stands now, the roads we improved yesterday need fixing today, but we´re paying for it well out into the future. It´s how Michigan has traditionally paid for its roads, which explains the situation we´re in today.
Q. Why are we using the new road money to pay off this debt?
A. The standard line is the Snyder administration and lawmakers are afraid that dumping $1.2 billion into a depleted road construction industry will mean fewer, more expensive bids and Michigan taxpayers won´t get the best return for their dollars.
The idea is that ramping up the road funding for a couple of years will give road construction companies time to get established, increasing the number of bids on projects and driving down costs.
The Michigan Infrastructure and Transportation Association claims this concern is unfounded. When Michigan took $1 billion in 2009 from Barack Obama´s stimulus program, MITA claims there were plenty of bidders and offering bids that were below the estimates of the previous two years and the two following years.
That said, socking away money to cover what is now a $250-$260 million bill every year means more money that can be spent on the road and bridge projects down the line.
Also, MITA members concede they lost a lot of their employees to other states so it will take time to bring them back or bring in well-trained replacements.
More broadly, though, this is an example of how Snyder operates. The former accountant doesn´t like a lot of debt hanging out there without a solid revenue stream to pay it off, which explains why floating more bonds to pay for our current patch of cruddy roads has not been an option for him.
Q. So does this mean it will be years before we begin to see real improvements in our roads?
A. Likely, yes. The answer is caveated because crews will continue working on the roads next year, and there will be some uptick in road construction. But, yes, it will be a few years before the full impact of Proposal 1 on the roads will be felt.
Q. Does local transit get more money under Proposal 1?
A. Yes. Buses and public transportation programs get another $28 million next year and $117 million in 2018, according to the Citizens Research Council.
Q. Shouldn´t the people who build the roads pay to repair them if they do a bad job?
A. Yes. A February report from the state Auditor General criticized MDOT for not doing enough to hold road construction companies accountable for warrantied roads that are falling apart too quickly. MDOT officials claim this is a staffing and resource issue, but also note that not every part of a road project has a warranty attached to it.
A key part of Proposal 1 is that MDOT, county road commissions and city road departments would have to have warranties for all pavement and reconstruction projects. County and local road departments must pass along their warranty programs to MDOT for approval.
Q. If I´m a Democrat, why should I vote for Proposal 1?
A. Democrats arguably received more policy "wins" in Proposal 1 than they were able to claim in Snyder first four-year term combined and they´re only able to claim them if Proposal 1 passes.
The more generous tax credit, an extra $50 million for "at-risk schools," the pledge not to use K-12 School Aid Fund money for universities and the combined $805 million in new money for schools, local governments and other programs are things that simply will not happen otherwise until Democrats take back at least one legislation chamber. You´re talking maybe 2017 or 2019.
Also as part of this, Snyder pledged to sign an executive order opening up opportunities for small businesses interested in contracting on transportation-related projects, which arguable could benefit minority-and femaleowned businesses.
The building trades unions and the AFL-CIO is backing Proposal 1 because of the road-building jobs it´s projected to bring.
Q. If I´m a Democrat, why shouldn´t I vote for Proposal 1?
A. Outside of the pain of seeing Snyder score another major public policy win, the basic argument about whether the sales tax and gas tax should be the main spigot for road funding is a valid question.
Under Snyder, businesses received a $1.7 billion tax cut when the Michigan Business Tax was pitched for the Corporate Income Tax. Earlier this year, we learned that Snyder´s administration would honor an estimated $9.38 billion in tax credits until 2029 to companies that received massive MBT credits during the Granholm administration.
Why are seniors and the middle class continuing to shoulder the state´s financial burden? And at what point will businesses pay their "fair share"?
Q. If I´m a Republican, why should I vote for Proposal 1?
A. Most business groups — with the notable exceptions of the National Federation of Independent Businesses (which is opposed) and the Michigan Chamber of Commerce (which is neutral) — support Proposal 1 because they want better roads for improved commerce.
A bumpy ride can damage apples and other products going to market. It also takes longer to get a widget from Point A to Point B if the road isn´t smooth. Time is money.
Republican legislative leaders want Proposal 1. Without it, $1.2 billion in cuts to the state´s roughly $9.5 billion General Fund would be politically toxic, putting the GOP House, in particular, at great risk to heavy losses in 2017.
Assuming further tax increases aren´t an option, doing nothing and looking politically weak is the alternative.
Q. If I´m a Republican, why shouldn´t I vote for Proposal 1?
A. It´s a $2.1 billion tax increase. It raises government spending by $2.1 billion. Both reasons make Proposal 1 an automatic no for fiscal conservatives who fail to believe there isn´t $1.2 billion to spare in $54 billion state budget.
Also, voting no puts additional pressure on Snyder and the Republican legislature to pass a repeal of the state´s prevailing wage law, the final frontier in the scorching of what is perceived to be union-friendly provisions in state law.
Q. Is there really no ´Plan B´ if Proposal 1 fails?
A. Not one proven to get the necessary 56 votes in the House, 20 votes in the Senate and the governor´s signature … and it’s not for lack of trying.
Rep. Pete Lucido´s idea to raid the Michigan Catastrophic Claims Association is guaranteed to come with hefty car insurance rate hikes, which would crush places like Detroit, where rates are among the nation´s highest.
Anything that repeals prevailing wage will be met by a gubernatorial veto. Other ideas have included gutting the business subsidies handed out by the Michigan Economic Development Corp. or expanding the corporate income tax … again, neither have Snyder´s support.
Former House Speaker Jase Bolger put together a plan based on future state revenue growth, but much of that "extra money" is now expected to go toward paying off these old tax credits. No legislator wants to put their name on a bill that cuts $1.2 billion from the state budget.
NO on Proposal 1
“Your representative owes you, not his industry only, but his judgment; and he betrays instead of serving you if he sacrifices it to your opinion.”
– Edmund Burke
If you care at all about Michigan, vote no on Proposal 1. It´s not about the money. It´s about the future.
The Legislature we expect and, in fact, need to represent our interests is addicted to cowardice and self interest. Voting for Prop 1 enables, perpetuates and, even worse, rewards this dysfunctional behavior.
How will we ever get a Legislature that is committed to returning Michigan to its prominence among the states if we continue to reelect legislators so grossly indifferent to their constitutional responsibilities that they refuse to fund the most basic of government responsibilities — safe roads for their citizens?
Because our roads are disgraceful, the Prop 1 vote is a tough choice. Either approve a measure that raises the state sales tax to 7 percent and provides a grab bag of goodies for schools, tax credits, creates jobs, etc., and starts — and only starts — to fund roads repairs. Or make the Legislature do its job: Find road repair money by raising taxes or cutting popular programs.
Supporters of Prop 1 say making the people decide is the all that we can expect from a Republican-controlled House and Senate paralyzed by fear of tax increases.
A Bridge Magazine article last week dissecting Prop 1 quoted Rep. Marilyn Lane, D-Fraser, who acknowledged that “it´s not the perfect pitch everyone would want. This is the best deal we´re going to get." But she misses the point. It isn´t the deal. It´s the lack of a legislative deal, making the people do what the Legislature should do. We have empowered a representative democracy to craft our laws. When it´s a tough decision, our lawmakers prefer the will of the mob. Considering that Michigan legislators earn at least $71,685 a year, the fourth highest pay for lawmakers in the country, we should expect more.
In the most fundamental sense a yes vote is textbook enabling behavior. It is akin to the parents who know that their son or daughter is drinking their liquor or taking their medications and choose to rationalize the behavior. Or the friends who cover missed mortgage payments for a chronic gambler who has drained his bank account.
It´s not that the Legislature is philosophically opposed to the government taking taxpayer money to fix the roads. It punted the issue to voters, essentially saying we won´t do it, but if you want to spend money on roads, go ahead. It´s not on us.
Voting yes means we become codependent in Michigan´s flawed lawmaking process, hoping like all enablers to avoid conflict and consequence.
But the consequence is important. Forcing the Legislature to confront road funding can be the destructive event that reshapes the political landscape. It will be impossible to ignore how it responds.
Will it pass on the issue as it has done in past sessions? Or will it seek cuts in education, funds for communities, the environment and job-creating measures to cobble together road repair money? Either way it will unmask a Legislature unworthy to deal with the issue of governance. Alcoholics Anonymous uses the term “hit bottom” to describe the disruptive event that initiates a change in behavior. The Legislature´s response to a failed Prop. 1 could be that event. Even those who year-after-year vote for fiscally frugal legislators may finally acknowledge that they deserve better.
Two factors have contributed to a Legislature so cowardly that it won´t deal with the road crisis: Gerrymandering and term limits.
House and Senate districts are contorted to protect incumbents and their political party. Because Republicans control the Legislature, districts are designed to ensure re-election. This happens for Democrats, too. House seats in Lansing and East Lansing are Democratic gimmees. So is the Senate seat.
But for now, Legislative dysfunction originates with the Republicans. Overwhelmingly, their districts are safe. Reelection threats come from a far right that embraces a no-tax orthodoxy. But even voters who favor this approach have needs. They want good schools, jobs, clean water and clean air, parks and communities are financially solvent. And all but the most selfish recognize that there is a cost to these benefits. Funding roads by cutting these sorts of programs should prompt some voters to reevaluate their choices. Do we really want to live in Mississippi?
Then there are term limits. They has distorted the legislative process. House members are limited to six years in office. For senators, it´s two four-year terms. In our term-limited Legislature there is no incentive for long-term solutions. The Prop 1 plan was hurriedly developed in the 2014 lame-duck legislative session by term-limited Jase Bolger, then the Republican speaker of the House. Now he´s the former speaker and it isn´t his problem. He runs a political and public policy consulting firm based in Grand Rapids.
There are other problems with Prop 1. Most notably, because it raises the sales tax, it is regressive, which means the financial burden falls more heavily on those with low incomes. An increase in the state´s earned income tax credit, part of the package, will lessen some of the sting. How much it helps is disputed, and regardless, by their very nature sales taxes increases favor the wealthy.
But the issue isn´t the plan. It´s the process. We deserve better from the Legislature. Voting no is how we start demanding it.
—Mickey Hirten
YES on Proposal 1
I hear a lot of people calling Proposal 1 a failure of leadership from in the Capitol. To be honest: I could not agree more. Michigan’s roads and bridges are crumbling, our infrastructure has been woefully underfunded for what seems like an eternity, — and somehow, this was the best our governor and our Legislature could do to solve that problem.
As someone who was there as it happened, I am still angry about it, but I am also voting YES on Proposal 1. While it may not be the perfect solution we want, it remains our single best hope to make a significant new investment in our roads, our schools and our families for years to come.
To be clear, Proposal 1 is far from ideal. In fact, I spent a great deal of time and effort last year crafting a different plan, one that former Senate Majority Leader Richardville and I created together in a bipartisan fashion to alter Michigan’s gas tax formula and allow us to invest significant new money into the roads throughout the state without the need for voters to do our jobs for us.
Whilst tax votes are the always the hardest to cast, we surprised many in Lansing when Sen. Richardville and I successfully got that plan passed in the Senate. It was not easy, and it was a close vote. But unfortunately, as happens all too often in Lansing, that bipartisan spirit fell apart soon afterward as those more interested in their own political grandstanding than finding solutions brought the process to a halt. Our plan was sunk for purely political reasons because the governor either could not — or would not — stand up to those within his own party that did not want to do the job they were elected to do.
We were left with a choice to either walk away with nothing or figure out what was still possible. As those discussions morphed into what ultimately became Proposal 1, I made sure that if the best we could do is ask the voters for help, we were at least asking them to support something that really protected schools and the poorest among us — solutions for which so many of us have long been fighting.
It is no secret that during my 14 years in the Legislature, my top priority was always kids and their education. I fought time and time again against cuts to our local schools, which is why I so often found myself at odds with all three governors with whom I served during my tenure.
Our kids are not a special interest; they are our future. They deserve better than to have money promised for them — in the School Aid Fund — be siphoned away year after year to balance the books for corporate giveaways and tax cuts that have not spurred growth.
That is why I am proud to say that while Proposal 1 may have been the result of a leadership breakdown, we successfully fought to include language in it that finally protects our kids’ education by triggering a ban on the governor ever diverting money out of the School Aid Fund to pay for corporate tax handouts again.
That means that on top of the $1.2 billion it would generate for our roads, Proposal 1 represents an additional $300 million investment into the School Aid Fund annually and a guarantee that every penny of that will be spent where it was meant to be all along: our kids’ classrooms.
Also, the passage of Proposal 1 restores the state’s Earned Income Tax Credit, which gives significant tax relief to Michigan’s working families — a bill in the package that I am proud bears my name.
There is little doubt that Proposal 1 will be the most frustrating Yes vote I have ever cast at the ballot box because we deserve better solutions from our leaders. The reality is, however, that a better solution is not coming from this Legislature anytime soon and whether you blame the governor, legislators or anyone else for that, voting no on Proposal 1 will do nothing to change the past or prevent those failures from happening again in the future.
Please join me in voting yes on Proposal 1 so that as we all work together to demand the leadership we so desperately need inside the Capitol, we are at least able to make the critical investments we so desperately need in our roads, our schools and our future.
—Gretchen Whitmer
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