Mlive

October 6, 2015

LANSING, MI — Michigan House Speaker Kevin Cotter “may be able to” support a road funding deal that would generate up to $800 million a year in new revenue, likely through some form of increased fuel taxes or other fees.

The House remains the biggest hurdle for any road funding deal. The Republican majority has so far balked at tax plans approved by the GOP-led Senate, and Democrats have been unwilling to support plans that rely heavily on reallocating existing budget dollars.

Both sides, along with Gov. Rick Snyder, generally agree on the need for $1.2 billion a year in additional road funding, but they’ll need 54 votes to get it done. Cotter’s willingness to at least consider $800 million in new revenue likely increases the odds of a deal.

“For me, it’s not just about the proportion — how much is new revenue and how much is general fund — but all the other details that go into making up a package,” Cotter, R-Mt. Pleasant, said Thursday. “I want to see what are the forms of new revenue, where’s it coming from and to what degree, but then also what other pieces of the package exist.”

The governor and legislative leaders from both sides of the aisle have been meeting regularly - twice in each of the past two weeks, according to Snyder — in hopes of reaching an agreement they all can live with.

“The lieutenant governor and I, I think it’s fair to say we both think there’s been a lot of progress in these meetings,” Snyder said last week. “Issues are coming up, we’re having a healthy discussion and people are trying to be good problem solvers. People are trying to come to a good solution.”

Cotter said he thinks they’re “very close” to a deal, but he also acknowledged he’s said that before.

“I’ve been saying for some time now that I’d like to get this to the floor in October, and I think we’re on a good pace to do that,” he said.

Snyder, who has been pushing for a long-term road funding deal for nearly four years, initially proposed a combination of fuel tax increases and registration fees. He recently indicated that truck weights or fees may also be part of a new revenue mix.

If leaders do agree on $800 million in new money for roads, they would look to dedicate another $400 million in existing general fund revenue in order to get to the long-sought $1.2 billion mark. The budget for the current fiscal year, which began last week, already includes $400 million in one-time and ongoing money for roads.

The are some concerns about future budget pressures, however, and the Snyder administration has sought to address a looming Health Insurance Claims Assessment shortfall during road funding negotiations.

Cotter, pointing to the bloated sales tax and gas tax ballot proposal that voters resoundingly rejected in May, continues to push for a “roads only” plan, but that doesn’t mean other issues aren’t being brought to the table.

Some Democrats have suggested that they may not be willing to back a roads plan if GOP leaders move forward with efforts to repeal Michigan’s prevailing wage law, which could happen later this year if petition signatures are certified.

There is also the possibility that any gas tax increase could be paired with some form of income tax relief. Senate Republicans passed a road funding plan that would have rolled back the state’s flat personal income tax in any year that general fund revenue growth exceeds inflation.

Democrats have pushed for a more targeted form of tax reform. Last week, they unveiled a “blueprint” for Michigan families that called for $1 billion in new and expanded tax credits, and some of those ideas have come up in road funding talks, according to House Minority Leader Tim Greimel, D-Auburn Hills.

“We’ve talked about all of these forms of tax relief and others, and we’re open to discussions with the other side of the aisle for something that works for everyone,” Greimel said last week.

While all sides continue to site positive momentum in road funding talks, it’s not clear how close they may actually be to a long-term road funding deal that can win enough votes in both chambers.

The House and Senate are both set to be in session for most of the next six weeks before a break for the holidays.