Road tax proposal in Grand Rapids might not be unique: Which city will be next?
Mlive, August 22, 2013
KENT COUNTY, MI – East Grand Rapids last year got almost $700,000 in road funding from the state’s fuel tax and vehicle registration fees. Yet, for every dollar that came from the state, the city spent $1.54 of its own money on road maintenance and construction, according to survey data circulated by the Grand Valley Metropolitan Council.
As state lawmakers continue to haggle over what to do about the condition of Michigan’s roads, a city income tax is being recommended in Grand Rapids. A new form of local revenue for roads also could become a topic in East Grand Rapids and other area cities.
“I think Grand Rapids is just ahead of us,” said Brian Donovan, East Grand Rapids city manager. “They’re saying we don’t have any money for our roads. We’re in the same boat. The gas tax just doesn’t cover our operations.
“We’re going to have to make some tough choices. It could be more tax dollars. It could be less maintenance. It could be a combination. We’re going to face those same questions that Grand Rapids is wrestling with.”
RELATED: Without extra state funding, income tax extension may not be enough to fix Grand Rapids’ roads
A streets task force in Grand Rapids last week recommended putting a 15-year income tax request on the May 2014 ballot to generate new revenue for road maintenance. The proposed tax would cost 0.2 percent of income for Grand Rapids residents and 0.1 percent of income for non-residents who work in the city. City commissioners will decide whether to put that to voters.
The $7.3 million of city money Grand Rapids put toward roads is 56 percent of the $13.1 million it got from the state gas tax and registration fees, according to the metro council survey. A sampling of other cities that responded to the survey: Grandville spends $1.23 of city money ($1.2 million) for every $1 of state funding ($950,000), Lowell spends 71 cents ($145,000 in city money to $245,000 in state money), Middleville spends $2.26 ($484,000 in city money to $214,000 in state money) and Walker spends 49 cents ($768,000 in city money to $1.6 million in state money).
“The reality from what the survey told us was they’re already spending about 40 percent of the road maintenance costs in local funds” or about 70 cents per dollar of state funding, said John Weiss, director of the metro council. “Some are paying significantly more in local funds.
“The message to the Legislature is there is significant local funding being put already into roads, general-fund dollars that could be used for other purposes.”
RELATED: Michigan road funding: Why don’t we just turn highways into toll roads?
Gov. Snyder wants the state to hike the gas tax and boost registration fees to generate $1.2 billion in new road funding, but the Republican-led Legislature added $350 million for roads in a new state budget set to start in October.
There’s talk of asking voters to increase the state sales tax, but apparently no consensus.
“I’m hoping that we can have a comprehensive solution that will not push it down to the locals to come up with their own money,” said state Rep. Rob VerHeulen, R-Walker, the former mayor of Walker. “To say go ahead and raise your own tax, I think that would be shirking our responsibility.
“Over the last 10 years they’ve been hammered pretty heavily (with revenue cuts from the state) and I just think that it’s our responsibility to find a solution at the state level. To the driver (on Alpine Avenue NW, for example), they don’t know or care whether they’re in Grand Rapids, Walker or Alpine Township. They just want to get from point A to point B.”
RELATED: Gov. Rick Snyder to address young professionals at Grand Rapids Press hub
VerHeulen, chairman of the House Appropriations committee on transportation, said he’s not hearing colleagues say “hey, let’s just do nothing and let the locals deal with it.” That said, there’s not necessarily an eagerness to come up with the amount of money Snyder wants to spend.
Adding road money to next year’s budget was a good start, said state Sen. Dave Hildenbrand, R-Lowell.
“There are some roads that need work, but I haven’t been able to swallow this need for $1.2 billion per year more when we’re already spending $3 billion a year. I haven’t been able to grasp that,” he said. “I think we’re making progress and, hopefully, next year we’ll be able to do that ($350 million amount) or more.
“There isn’t an appetite in the Legislature to raise the gas tax or registration fees at this point. In the short term, we’re just going to have squeeze pennies and make it work.”
