Mark Richardson on Michigan's Proposal 1

I ran across a well-researched, well-written analysis of Proposal 1 – Michigan’s complex, convoluted, controversial ballot measure that’ll be decided by voters this coming Tuesday – a few days ago that conveys the reasons why the “road and bridge repair proposal” should be defeated much better than I can. The author, Mark Richardson, gave me permission to share it here for “What’s the Diehl?” readers.

After much study and a lot of soul-searching, I’ve decided to vote no on Proposal 1. Needless to say, I’m speaking for myself only and no other organization or group I’m associated with.

I understand very well that our roads are in deplorable condition. And contrary to conservative opponents of Proposal 1, I believe we need to increase taxes to repair and maintain them. We spend less per capita on roads than any other state.

I also understand that delaying needed road repairs just adds to the costs, and that Michigan residents pay a “hidden tax,” in the form of auto repairs, as a result of bad roads. I am also aware of the earmarks for education and local governments in the legislation appended to the ballot proposal. I understand how schools and municipalities have struggled and I know that additional money would help.

None of these facts are enough to persuade me to vote yes.

Proposal 1 would virtually complete, and via constitutional amendment cement into place, the largest tax shift from business to individuals in Michigan history.

Beginning in 2011, Governor Snyder and the Republicans have moved to minimize or eliminate the tax burden on business in this state. They replaced the Michigan business tax with a flat 6% tax that resulted in a $1.7 billion tax cut for business. In 2014 they eliminated the business personal property tax. This tax cut starts out at $100 million in 2016, increases to $350 million in 2017, and to $500 million per year in 10 years. All in all, Snyder and company will have reduced business taxes by about $2 billion per year, give or take, when the cuts are fully phased in.

At the same time the Republicans have increased taxes on individuals. Eliminating deductions and credits, taxing pensions, and canceling a scheduled income tax rate reduction increased individual taxes by about $1.4 billion per year starting in 2012. Now, Proposal 1 asks us to increase the sales tax by 17% and the motor vehicle fuel tax, initially, by over 100%. These, together with other measures, such as the elimination of registration fee discounts based on vehicle depreciation, amount to a combined tax increase of about $2 billion additional dollars to be paid, again, mostly by individuals.

I believe in fair and progressive taxation. Proposal 1 would result in a tax system that is more regressive and more unfair than ever before. Almost 100,000 businesses in Michigan pay no taxes at all anymore. The business share of overall taxation is now smaller in Michigan than it is in 47 states. On the other hand, Michigan would end up tied for the second highest sales tax rate in the country if Proposal 1 is adopted. The increases in the sales tax and fuel tax will add hundreds of dollars to the tax burden of average households. The proposed increase in the earned income tax credit will help, but not by enough to offset the increase.

I might feel differently if I thought Proposal 1 would actually solve our problems. But reliable estimates are that it will actually take at least $2 billion or more per year to put our roads in acceptable condition. Proposal 1 would make $1.2 billion available, raising questions as to whether it would even raise enough money to be effective.

Moreover, road funding will depend even more heavily on fuel tax revenues, which may continue to decline as vehicles become more efficient and as people drive fewer miles. Declining fuel tax revenue is the reason we fell behind on road maintenance to begin with! In short, I do not see Proposal 1 as the answer to our road problems.

Supporters on the progressive side say the alternatives are worse. In the short term, they are. I have no illusions about what this legislature would try to do. But we should bear in mind that the next election is just 18 months from now. We should keep fighting for the philosophy of government we believe in, now and next fall.

It seems to me that the economic and social harm to this state which would result from the system of regressive taxation we are being asked to ratify far outweighs the risks harm from continuing to fight for a fair and feasible funding mechanism for the roads.

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Click here for the official ballot language. And click here for MLive’s slideshow entitled, “Michigan Proposal 1 and the 10 laws it would trigger.”

Mark Richardson, 64, is an attorney who focuses on environmental and zoning and planning law. A graduate of Michigan State University and Wayne State University Law School, he worked in a county prosecutor’s office for over 15 years where, as chief of the water quality unit, he prosecuted environmental lawbreakers. He teaches environmental law and policy at Oakland University, serves on his local planning commission, and helped create both the Michigan Environmental Council and the Michigan League of Conservation Voters. Mark and his wife, Susan, are the parents of two adult children. He’s been to Alaska twice in recent years, fishing and hiking in the wilderness, and enjoys baseball, cycling and social media.