Mich. gov makes tax proposals for road repairs

LANSING, Mich. (AP) -- Gov. Rick Snyder urged Michigan legislators to put aside short-term political concerns and approve tax and fee increases needed to raise an additional $1.2 billion a year to patch up Michigan's ailing roads and bridges.

Generating new money for Michigan's transportation network was the centerpiece of Snyder's third annual State of the State address, delivered Wednesday to a joint session of the state Legislature in the Capitol. The Republican governor sought support from both parties midway through a turbulent term in which he has pleased business interests but alienated Democrats and organized labor with tax relief for corporations and measures that have weakened unions' powers.

Snyder provided few details of his road plan in his nearly hourlong speech, which also touched on education, insurance reform and a variety of other issues. Instead, he focused on convincing lawmakers facing re-election campaigns next year that rebuilding the state's crumbling transportation infrastructure is important enough to risk upsetting motorists with a request to pay more for gasoline.

"We're not here for us," he told lawmakers. "It's an honor and privilege to be elected, and we're here to serve 10 million people that are counting on us. So let's get the job done."

Republicans skittish about raising taxes said they would give the governor's funding proposals fair consideration, while Democrats said he was continuing to place more burdens on the middle class while giving breaks to wealthy corporations.

In a briefing for reporters beforehand, senior policy adviser Bill Rustem said Snyder favored replacing the tax on fuels paid at the pump with a levy at the wholesale level, which could be passed on to consumers and rise with inflation. He also supports raising the annual motor vehicle registration fee and allowing local governments to increase it even further to raise money for fixing local roads, Rustem said.

"We need to invest more in our roads. ... It's time," Snyder said, arguing that while his plan would cost about $120 per vehicle, motorists would recoup most of that by having lower repair bills as highways and local roads are improved. "This is not about costing us money. It is about saving us money and building for the future."

If nothing is done to raise more cash, he said, the cost of fixing Michigan's transportation infrastructure will rise to $25 billion instead of the roughly $10 billion motorists would pay under his proposal, which he said would create 12,000 jobs and prevent 100 crash-related deaths a year.

"This is our opportunity, folks," he said. "We can decide how long we want to argue about it, how political we want to make it, or we can just use some common sense and get it done."

House Speaker Jase Bolger said Republicans declined to endorse particular measures but said the Legislature had to solve the transportation funding shortfall. "We cannot punt this to the future," he said.

Tim Greimel, recently elected as leader of the House Democratic caucus, said Snyder provided too little information about his infrastructure plan. "It's clear the governor's idea of how to pay for roads is yet further increases taxes and fees paid by middle class and working families," he said.

Michigan's retail-level motor fuels tax has been stuck since 1997 at 19 cents per gallon for gasoline and 15 cents per gallon for diesel fuel. State officials say inflation and improved fuel efficiency have steadily eroded the transportation fund's purchasing power, leading to the deterioration of Michigan roads. If nothing is done to raise more repair money, two-thirds of the roads will be in poor condition by 2020, Rustem said.

In addition, Snyder called for moving more state social workers into troubled elementary schools, reforming Michigan's no-fault auto insurance program to limit the amount of medical claims, establishing an agency to crack down on insurance fraud, improving mental health services and establishing a state agency to help military veterans obtain federal benefits.

Michigan's schools continue to underperform, Snyder said. Fewer than one in five students are ready for college, and more than 60 percent of those going to community college need remedial courses. "That's absolutely unacceptable," he said.

He said he wanted to expand a program begun two years ago called the Education Achievement Authority, which provides resources and new learning strategies for schools with the lowest academic performance in the state. It began with 15 schools in Detroit.

Snyder didn't say how many schools should be added to the program. Rustem said a starting point for discussions with lawmakers would be a bill proposed last year that could have included up to 50. Democrats contend it weakens public schools and usurps local control.

Senate Democratic Leader Gretchen Whitmer complained that Snyder said too little about education.

"Over the last two years I've seen this governor and the Republican Legislature push through an agenda that picked corporate bottom lines over the education of our kids," she said.

Snyder also voiced regret about the bruising legislative battles of 2012, when thousands of angry demonstrators protested the Legislature's quick approval of right-to-work measures making it illegal to require non-union workers to pay fees to the unions that negotiate their wages.

"I hope we can work together," he said, promising "to work hard to find common ground."

But the hundreds of protesters clustered near the main entrance of the Capitol weren't in a conciliatory mood. They chanted "liar" as Snyder spoke, and a banner stretched across the stone stairway read, "You can't trust Snyder."

"Every time he turns around, we're going to be there," said Mike Green, president of United Auto Workers local 652 in Lansing.

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Associated Press reporters Jeff Karoub and Alanna Durkin contributed to this story.