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Biz groups push plan to raise $1.2B for state infrastructure repairs

From Crain’s Detroit Business

February 25, 2013

By Chris Gautz

Business groups representing the state’s largest industries gathered Monday morning to again urge the Michigan Legislature to act on a plan to increase revenue by about $1.2 billion annually for infrastructure repairs in the state.

The point was clear from those in the room: Doing nothing is not an option.

The form of the plan crafted by the Legislature to increase revenue is open for debate. Most business leaders prefer a system based on user fees that would affect both individuals and businesses and would be similar to what Gov. Rick Snyder put forward in his proposed budget this month.

Snyder’s plan would raise both gas and diesel taxes at the pump to a flat 33 cents a gallon and increase registration fees for vehicles and heavy trucks.

“User fees are the best and the fairest way to fund transportation,” said Brad Williams, vice president of government relations for the Detroit Regional Chamber.

Mike Johnston, vice president of government affairs for the Michigan Manufacturers Association, said that taking no action will just make the problem bigger later, requiring an even higher gas tax increase eventually.

“We’ve addressed so many structural problems here in Michigan, and transportation stands out like a sore thumb,” Johnston said. “It’s something that has to be addressed, and we ought to do it now.”

Jim Holcomb, senior vice president of business advocacy and general counsel for the Michigan Chamber of Commerce, said it is comparing apples and oranges to say the business community received large tax breaks in the past two years and therefore should shoulder more of the burden in this plan.

Chamber members recognize that transportation is an essential government service and are willing to pay for it, he said, as they would under a plan to increase gas taxes and registration fees.

Williams said the need to fix the state’s infrastructure is great, especially in Southeast Michigan.

“We need the Legislature to invest to make sure that those pieces of infrastructure stay in good condition and that our businesses can make sure they get their products to market,” Williams said.

Right now across the state, the condition of the roads hurts the condition of food products that farmers ship, said Matt Smego, legislative counsel for the Michigan Farm Bureau.

Some farmers have indicated that they lose anywhere from 5 percent to 10 percent of their fresh product because it is bounced around and damaged while traveling on state roads, Smego said.

Ninety percent of agricultural freight in the state travels over Michigan’s roads and bridges, he said.

“We work in a global marketplace, and so shipping that product all over the world is important, and we’ve got to have the infrastructure necessary to do that,” Smego said.

Part of the hesitance to approve Snyder’s plan or something close to it is that everyone thinks someone else should pay for the improvements and that constituents are telling their lawmakers to vote against raising the gas tax or registration fees.

But neither the Detroit nor Michigan chambers would commit to including a vote in support of increased transportation funding on their legislative scorecards this year.

“No one vote determines whether or not you get the political support of the Detroit Regional Chamber,” Williams said.

But he noted that transportation funding is at the top of the chamber’s legislative priorities this year.

Chris Gautz: (517) 403-4403, Twitter: @chrisgautz