THE BUMPY ROAD TO A BUDGET
After a promising beginning with insurance reform, the wheels fell off the cart.
Lee Schwartz, EVP for Government Relations

The 100th Michigan Legislature’s regular session of 2019 saw policymaking take a back seat to state spending as the fight over the budget kept the Legislature from focusing on other, less impactful issues.

Despite the positive bipartisan outcome on no-fault insurance reform early in the session, the issue of road funding resulted in the most contentious budget negotiations in the last two decades.

Having run on the mantra ““Fix The Damn Roads,” Governor Gretchen Whitmer made a 45-cent increase in the gas tax the centerpiece of her first budget message to the Legislature. It would have followed on the heels of the 15-cent per gallon tax increase approved in 2015 for “fixing

the roads” and would have moved Michigan to the highest per-gallon rate in the country. Builders pointed out passage of this tax would raise the cost of an average 15-gallon fill-up by $6.75 for each vehicle they operated. The proposed tax was met with less than raucous approval on either side of the aisles.

A series of several different plans for additional road funding were floated by Republican majorities in the House and Senate but rejected by the governor. On April 19, 2019 she announced she would not sign a budget without additional money for a “real” road funding plan, a position she reiterated throughout the summer. Michigan’s Constitution requires a balanced budget be in place when the new fiscal year starts each Oct. 1.

Both sides charged the other with walking away from the negotiations and engaged in a war of quotes and press releases. With bipartisan relations becoming increasingly strained, budget discussions over summer failed to produce any tangible results. Republicans offered a plan which eliminated the sales tax on gas and replaced it with an equivalent increase in the gas tax. A portion of the sales tax on gas goes to school funding, not roads.

With the Legislature’s rejection of the governor’s plan to increase gas taxes by 45 cents a gallon and the governor saying the Legislature had not offered a realistic counter-proposal that did not put teacher pension funds at risk, a September 9th truce was declared by press