By Kent Wood
There aren’t a lot of easy decisions in the business world. Tough calls are needed most every day on business strategies, resources, personnel, planning, capital improvements – the list goes on. Most often the best decisions are made with an eye to the future, and weighing the long-range impact of decisions against the short-term gain of an action – or in some cases inaction.
That’s where the Chamber found itself in the debate over the state Proposal 1 road/transportation ballot proposal that goes before Michigan voters on May 5. It looked like state lawmakers were going to take some sort of long-overdue action late last year to infuse new revenue into the state’s badly deteriorating road/transportation network, one involving an increase in Michigan’s long-stagnant gasoline tax, higher vehicle registration fees and other measures.
But when lawmakers shifted gears and agreed on a proposal to add a penny to Michigan’s 6 cents on a dollar sales tax needing voter approval, the howling quickly began. Pundits and politicos complained that legislators “punted” the issue to voters and failed to show leadership on the transportation issue. Many legislators noted that a modest increase in the sales tax is the best way to raise the most revenue from the widest range of taxpayers, and that any increase in the state sales tax needs approval from Michigan voters.
It’s a scenario that’s created challenges for business organizations like the Chamber, which endorsed Proposal 1 earlier this month. Higher taxes are always a dicey proposition for business organizations. They significantly impact business operations, overhead, employees – they hit broadly across the bottom line. Plus, adding to the sales tax in a destination area like the Grand Traverse region that relies heavily on travel and tourism dollars can seem a bit like biting the hand that’s fed our area for decades.
Given all that, it would’ve been easy for the Chamber to stay on the fence over Proposal 1. But doing nothing is what’s created the poor condition of our roads and bridges that exist today, and will ensure our transportation network will continue to deteriorate at an accelerating rate. That’s not leadership, and only puts off an inevitable day of reckoning for our long-neglected transportation system.
There’s been a lot said about what’s wrong with Prop 1 – but here are some things it will make right going forward:
- It removes the state sales tax on gasoline sales to create a more equitable and simpler tax on fuel sales. Michigan is among just a few states still collecting sales tax at the pump.
- It creates a tax system that ensures all taxes paid at the pump go to the benefit of our roads, bridges and transportation system.
- It begins to address a problem right now that will only cost Michigan citizens more the longer we wait.
There aren’t any easy solutions for the challenges that face Michigan’s transportation network. For all the talk about a “Plan B” for road funding or claims that the transportation system can be sufficiently maintained with existing revenue, there’s nothing that’s gone in Lansing over the past decade plus to indicate simple solutions or quick fixes are out there somewhere.
Much more likely, our state lawmakers will have to resort to other tax and fee increases – and/or taking from other important state services like public education or health – that won’t come close to raising the amount of dedicated road and transportation dollars required to maintain our aging infrastructure. Each year we wait adds hundreds of millions to the future costs to fix our roads.
From that lens, the importance of passing Prop 1 becomes much more clear. Michigan’s economic recovery has taken root in recent years thanks in part to significant structural changes in how state government operates. This is another opportunity to continue down that road – and upgrade hundreds of more miles of roads each year in the process.
Kent Wood is the Director of Government Relations for the Traverse City Area Chamber of Commerce and the Northern Michigan Chamber Alliance. Contact him by email at email@example.com