Although lawmakers have returned to their districts for summer recess, a lot has occurred and continues to occur towards finding a long-term sustainable solution to our road-funding problem in Michigan. Both the House and Senate have passed their respective plans to increase over $1 billion annually to transportation in Michigan and legislative leaders continue to discuss behind closed doors how one plan can get approval in both chambers as well as the governor’s signature.
For the first time this session, the four legislative leaders and Governor Snyder held a conference call and the only topic discussed was road funding. As these meetings are held in private, we rely on obtaining bits and pieces of information from the meeting through discussions with the leaders and staff. From all accounts, the initial discussion went well and there are plans to hold more calls and meetings in the very near future. The Republican Speaker, Majority Leader and Governor have weekly meetings where road funding is often discussed; however, this was the first time that the Democratic leaders in the House and Senate were invited to participate. It is likely that any legitimate road funding solution will have to be bi-partisan in nature.
The House and Senate return to work the week of August 17 and are tentatively scheduled to be in for two weeks. Our discussions with House leadership indicate that road funding is the only topic up for major discussion in that time period and that they would like a solution in place before Labor Day. With the continued discussions behind the scenes, we are hopeful that this is possible and we can put this important issue behind us for several years to come.
Finally on the state front, you may have read that there is a new ballot proposal floating around that would raise the corporate income tax in Michigan from six percent to 11 percent and $900 million of the added revenues would be put towards transportation. This proposal is being circulated by several unions that MITA members associate with; however, at this point we cannot support their efforts for a variety of reasons. First and foremost, Proposal 1 on May 5 sent a clear message that the public wants our elected officials to come up with a road funding solution themselves. MITA and our members were all in to attempt to pass Proposal 1 and it is unlikely we will be involved in another ballot initiative any time soon. Secondly, many MITA members pay corporate income tax and almost doubling that tax would be devastating to many companies in the heavy construction industry. Lastly, and maybe most importantly, it is not enough money. The revenues raised by increasing the corporate income tax to 11 percent is approximately $900 million, yet that is all the ballot calls for to invest in transportation. We need a solution that properly invests in our transportation system, at least $1.2 billion annually, and anything less will continue to erode our network.
Another Extension for the Federal Highway Trust Fund
As the federal government was pressed up against yet another deadline for the Highway Trust Fund to expire (July 31), Congress once again decided to punt the ball and pass a three month extension of the current program getting the fund through October 29. This is a familiar scene at the federal level; however, there is some positive light to this most recent scenario. Although only a three month extension was able to see support from both chambers of Congress, the Senate actually passed a long-term funding solution for the Trust Fund which included increases not seen in recent history. The Senate passed a six year reauthorization bill with 65 votes, meaning it gained support from both Republicans and Democrats.
Even with some reductions, highway investment under the DRIVE Act’s first three years would grow at annual rates ranging from 3.1 percent to 3.5 percent—a $4 billion increase by 2018. By comparison, highway investment grew by 1.4 percent annually under the two-year MAP-21 surface transportation law. While we can all agree that this isn’t enough of an investment in our nation’s transportation network, it is the first time since 2005 that we have seen any positive momentum towards a long-term solution. Having more stability and assurance that dollars will be there on the federal level for multiple years to come will give MITA members more confidence in investing into their companies for the future.
Congress is now on a five-week break back in their districts, and when they return the House will have the Senate passed version to debate. House Transportation & Infrastructure Committee Chairman Bill Shuster has already indicated his desire to immediately return to session and take on a long-term bill this September.
If you have any questions on what is going on at the state or federal level, please do not hesitate to contact Mike Nystrom, executive vice president, at mikenystrom@mi-ita.com or Lance Binoniemi, vice president of government affairs, at lancebinoniemi@mi-ita.com. They can also be reached at the MITA office at 517-347-8336.
