(Source: MIRS.news, Published 12/09/2024) House Minority Leader Matt Hall (R-Richland Township)'s plan to shift $2.7 billion in tax revenue to road infrastructure will mean "major reductions" of around 17 percent to the state's General Fund, according to the Citizens Research Council (CRC) in a report completed late last week.
Of the $2.7 billion, around $300 million is in surplus going into Fiscal Year 2025, meaning $2.4 billion will need to be found through budget cuts or revenue enhancements. The Department of Health and Human Services makes up 45 percent of the General Fund, Corrections 15 percent, universities 13 percent, revenue sharing to local governments 4 percent and everything else 23 percent, or $3.386 billion.
If the plan is to move without new revenue, it represents "the understanding that this revenue shift will require a substantial restructuring of the services that state government can provide," the CRC report from Bob Schneider concludes.
CRC's research has Michigan ranked 40th among the states in road system conditions. However, Michigan also ranks 30th among the states regarding road revenue and expenditures across the key metrics, meaning some "states are getting more bang for the buck with the road funding they do have," according to the report.
The report also noted that the way money gets to county and local road agencies "is not very effective" at sending money to the areas that have the highest maintenance and repair needs. If lawmakers are going to go through the exercise of providing more money for roads, they should also reform how that money is carved up.
Hall's plan has three major pieces: shifting $1.2 million of Corporate Income Tax (CIT) revenue to roads, redirecting $600 more in CIT money that had been going to economic development to roads, and ending the sales tax on gasoline and replacing it with a comparable tax in which the revenue goes to roads.
