Michigan voters overwhelmingly voted against increasing the state’s gasoline tax and sales tax to fund transportation infrastructure spending.
The ballot amendment would have increased gas taxes in the state by either 42 cents per gallon or 14.9 percent of the base price of gasoline, depending on which was greater. It would have also increased taxes on consumer purchases by 1 percentage point.
Over 80 percent of Michigan voters rejected the proposed constitutional amendment, which would have also created 10 new state laws.
‘A Simple Tax-and-Spend Plan’
Mackinac Center for Public Policy Assistant Director of Fiscal Policy James Hohman says the proposal was an example of “tax-and-spend” politics.
“This proposal was legalistically complex, but was, at its base, a simple tax-and-spend plan,” Hohman said. “They wanted to increase fuel taxes, sales taxes, and vehicle registration taxes, and then spend it mostly on the roads, but a lot of other items as well.”
Proposal 1, Hohman says, asked for too many sacrifices from taxpayers.
“Our roads are not what they probably should be,” Hohman said. “Technically, they are better than what they’ve been the past decade, but they are projected to start decaying at a pretty fast clip. So, the question for Lansing is ‘do we want to cut our budget, or do we want to have taxpayers cut their budget?’ and this Proposal 1 was exclusively the latter and none of the former.”
Reason Foundation Transportation Policy Analyst Baruch Feigenbaum says voters recognized Proposal 1 was not a wise investment of taxpayer money.
“I think the issue is that there were too many things going on,” Feigenbaum said. “They were going to increase this tax here, they were going to do this thing over here, and it became so convoluted that nobody really had an incentive to vote for it, both because almost everyone was going to be affected and it didn’t do much of significance for most folks. So, they were paying for it, but not receiving much in return.
“When you get these complicated bills that force people to pay more but don’t have a lot of supporters, a lot of beneficiaries in the general public, they tend to lose pretty overwhelmingly,” Feigenbaum said. “So the margin was a little bit larger than I would have thought, but I wasn’t shocked that it lost big.”
‘Work With the Private Sector’
Michigan lawmakers should use private-public partnerships to help reduce burdens on taxpayers, Feigenbaum says.
“If you’re going to be asking folks to pay more out of their pockets, you’ve got to be giving something that benefits them, and the majority of folks just did not see any benefit to paying more,” Feigenbaum said. “Also important is that, if you’re a municipal government, you should try to find ways to work with the private sector to cover some of the costs of these projects so that, when you go to the taxpayers, you can ask them for less money.”
Amelia Hamilton ([email protected]) writes from Traverse City, Michigan.