Thursday, March 26, 2015

NO! Proposal One

RightMI.com is your ‘go to’ site for Proposal 1 information: More Info On Proposal One. Share that link.

For your convenience, I've followed some links from that post and you'll find them below. I recommend checking the full analyses (fifteen minutes or so each), but I've included some shorter references (a couple of minutes) for the time challenged. This is a Constitutional Amendment, people: Understanding the detail is important.

First, from The Mackinac Center, Proposal 1 of 2015: An Analysis. The synopsis.

The full analysis, from which I quote:
Road construction in Michigan is primarily paid for with revenues from fuel taxes and vehicle registration fees. Since these taxes are paid by people driving vehicles on public roads, they function as a user fee.

Taxes motorists pay do not meet the strict definition of user fees, however. Vehicle registration taxes for passenger vehicles, for example, are based on their value rather than their estimated wear on the roads. Further, hybrid and electric cars tend to be heavier and thus cause more wear on the roads, but owners of these vehicles buy less fuel and pay less in fuel taxes.
That does not mean drivers of electric/hybrid vehicles get away free. Remember, this isn't about fixing the roads, it's about modifying the Constitution to increase taxes. What do you think will happen as we continue to reduce our use of taxable fuel? A tax on miles driven, perhaps? Or, increases in registration fees for electric/hybrids:
Proposal 1 would create higher registration fees for electric vehicles and electric-powered hybrids. Owners of these vehicles would pay an additional $75 on their annual registration fees for vehicles under 8,000 pounds and $200 more for vehicles over 8,000 pounds. This applies to vehicles that are “of a brand or has been modified to be powered solely or predominately by electricity under normal average class operating conditions.”
I also commend to your attention a report by the Citizens Research Council of Michigan: Statewide Ballot Issue: Proposal 15-1. Synopsis here.

Full analysis here:
As part of the final agreement, the Legislature intended to earmark a portion of the new revenues generated in FY2016 and FY2017 from the motor fuel tax increases towards paying down current State Trunkline Fund debt tied to past state road building initiatives. The package is estimated to generate just over $1.2 billion during these first two fiscal years from the motor fuel tax increases. Legislative intent was to allocate $400 million in FY2016 and $800 million in FY2017 of the new tax revenue for distribution through the state’s transportation funding formula, most of which would go to state and local road agencies. The remainder (roughly $860 million in FY2016 and $460 million in FY2017) would go to pay down state road debt.

However, the language included in Public Act 468 of 2014 to effectuate this earmark appears to be flawed. The language specifies that “the first $400,000,000.00 received and collected under this act” in FY2016 and “the first $800,000,000.00 received and collected under this act” in FY2017 would be distributed through the state funding formula. But, revenue “received and collected under this act” includes not only the new revenue from the recent legislative changes, but all existing revenue as well. As such, a literal reading of the language would suggest, for instance, that around $1.7 billion (the $800 million intended earmark plus current baseline fuel tax revenue of around $900 million) would be earmarked for debt reduction in FY2016.a Under that reading, FY2016 funding available for formula distribution would actually go down by around $500 million from current levels.
Demonstrating what happens when you write a bill hurriedly and don't have time to read it before voting.

For those who prefer video, CRC has a Webinar (a little over an hour) on Prop 1-15. This expands on the history of the Michigan Constitutional limitations which brought the legislature to propose a Constitutional Amendment, and why that just places increased future constraint on the Legislature. They'll be forced to live with what they created, and they may not find that congenial to addressing future funding issues. For example, they are removing $204 million in funding from state universities - do you think that will stand, or will they come back for more taxes when UofM and MSU complain they're out of money?

Again, thanks to RightMI.com.

1 comment:

Jason Gillman said...

Somehow I missed this plug. Thanks!!