Dissecting Claims Of Stealing From One Part Of Budget To Fund Another
As Governor Gretchen Whitmer makes the case for her 45-cent per gallon gasoline tax increase and Republicans who control the Legislature label the proposal a nonstarter, there's a subplot playing out.
It involves how the $2.5 billion the tax increase would raise would be used and the history of how Michigan funds roads. And it is a debate where both the governor and the Republicans are employing the same word: steal.
Be forewarned, there will be math.
By increasing the gasoline tax and the diesel fuel tax 45 cents per gallon, as well as hiking the tax on alternative fuel vehicles, that raises $2.5 billion. So that's $2.5 billion for roads, right?
It actually would be $942.5 million more for the upcoming 2019-20 fiscal year that starts October 1 and then $2.162 billion more in the 2020-21 fiscal year once the 45-cent tax increase is fully phased in.
This gets confusing because everyone is throwing around different numbers.
The Republicans are saying that once fully phased in, the gasoline tax would only bring in $1.9 billion more because, by the 2020-21 fiscal year, the 2015 road funding plan calls for the General Fund to contribute $600 million toward roads. Ms. Whitmer's plan would cancel that allocation given the influx of $2.5 billion in new revenue from her fuel tax increases, so Republicans subtract that $600 million and come up with $1.9 billion.
The State Budget Office has slightly different numbers than the ones I used because they are assuming the cancellation of the $325 million from the General Fund the 2015 plan requires be put toward roads in the 2019-20 fiscal year.
Still with me?
Here's the thing: In the current fiscal year, the state allocated $300 million from the General Fund toward roads. Not $325 million and not $600 million. So, on a year-over-year basis, which I think makes the most sense when figuring out how road funding would increase, it would be $942.5 million for the upcoming fiscal year and $2.162 billion for the 2020-21 fiscal year.
Now that we've covered that matter, back to the word I mentioned earlier: steal.
Republicans have said Ms. Whitmer is using the tax increase to steal money to pay for her priorities, that instead of proposing a tax increase to raise the money needed for the roads, she is proposing more than she needs so she can shore up other areas of the budget. They question how Ms. Whitmer can go around saying the state needs $2.5 billion more for roads and insist on that number when in fact her proposal means several hundreds of millions of dollars less than that.
Ms. Whitmer has said it is time to end the use of General Fund money for roads, that in effect, the Legislature and former Governor Rick Snyder stole money from the rest of the budget to pay for roads. Pulling the money out of the General Fund led to moving money from the School Aid Fund to pay for programs traditionally paid out of the General Fund: community colleges and higher education. That meant middling funding increases for K-12 school operations.
Indeed, it is only in the past several years, as the roads have dramatically worsened, that the General Fund has become a funding source for roads. I can still remember an attempt about 18 years ago on the House floor to add General Fund money via amendment to the Department of Transportation budget and the Transportation subcommittee chair (Judie Scranton) indignantly rebuffing the proposal by noting "not a dime" of General Fund money was in the budget.
There will be a couple countervailing messages in the weeks to come: Republican will push the line that whatever revenue they raise will go to roads and roads only. Ms. Whitmer will counter the state needs to tackle multiple crises – roads, K-12 schools and clean water – and cleaning up what funds go to what areas of the budget is instrumental.
Just one more subplot to watch in the weeks and months ahead.Back to top