Michigan road funds deal in doubt this session

Gov. Rick Snyder and legislative leaders met twice Wednesday to negotiate a potential tax increase to improve Michigan's deteriorating roads, as chances rose that no deal will be struck before lawmakers adjourn for the year.

Thursday is the final voting day of the two-year session, and time is running out to pitch a compromise proposal to rank-and-file members of the Republican-led Legislature. The Senate and House approved vastly different plans after the November election.

The Republican governor and legislative leaders planned to talk at least once more in the Capitol, an early-evening meeting Snyder said could be crucial. If no agreement is reached then, "it starts to become extremely difficult" to pass a road funding fix Thursday, he told reporters Wednesday afternoon.

"Then I would say we're clearly in a situation where we may not see something," Snyder said.

The Senate plan would more than double gasoline and diesel taxes over four years. The rival House proposal would eliminate the sales tax on fuel within six years and increase per-gallon gas and diesel taxes by the same amount, averting a tax increase by moving money for schools and local governments to road and bridge construction.

Another bill pending in a House-Senate conference committee could boost license plate taxes.

Snyder and legislative leaders say at least $1.2 billion more a year is needed to bring highways, streets and bridges up to par. Vehicle registration fees and taxes at the pump now account for $2 billion in annual transportation infrastructure funding. But other than agreeing on the amount needed and that the state's flat per-gallon fuel taxes should be based on wholesale prices instead, they have sharp differences.

Republican House Speaker Jase Bolger does not think the entire $1.2 billion should come from new taxes and wants to make sure all taxes at the pump pay for transportation projects, which is not currently the case. The governor, Senate Majority Leader Randy Richardville and Democrats worry about harming K-12 and municipal budgets as a result.

Richardville hinted that the Legislature could put a sales tax-related road funding plan on the statewide ballot, without a lawmaker-crafted plan to fall back on if voters reject the measure.

"In a perfect world, it's always best to have the safety net. Sometimes you do, sometimes you don't though," he said.

Ideas for generating an additional $1.2 billion have "moved around quite a bit in the last few days and we're not done yet," Richardville said.

Negotiators are cautious about boosting fuel taxes too high and making sure a tax increase does not disproportionately affect lower- and middle-class Michigan residents.

Senate Minority Leader Gretchen Whitmer said she has asked House leaders to vote on the Senate-passed fuel tax increase. They could request that the bill be returned from a conference committee for an up-or-down vote, she said, noting that Snyder and business, labor and education groups all back the bipartisan Senate plan.

"We took a tough vote. We deserve to have a vote in the House on that plan because it's a good plan," Whitmer said.

She said while legislative leaders are discussing a ballot proposal, there is "only real interest if the Senate plan doesn't float over there."

Bolger spokesman Ari Adler said House Republicans cannot support the Senate plan and that Whitmer "needs to learn that compromise is a two-way street, not a one-way avenue with her name on it."