JACK SPENCER: Snyder goes after road funding

One thing that can’t be said about Gov. Rick Snyder is that he’s ducking tough issues. When he ran for office he promised change and reform. Like it or not, no one who has been paying attention can claim he hasn’t delivered on that promise.

It’s an irony of politics that so many voters say they want change, but when real change occurs it is always contentious. Most voters also say they want leaders who say “damn the torpedoes,” and do what they believe should be done. Snyder has clearly been doing just that. We’ll have to wait until 2014 to see if it ultimately pays off for him.

In Snyder’s first year he moved toward reducing the disparity between government employee salaries and benefits and those in the private sector, while also breaking the longstanding taboo against cutting K-12 per pupil spending. As if that wasn’t enough, in the same year he pursued what was to be an unpopular bridge project and got rid of the tax deduction on pensions for those younger than 67 years of age.

He spent much of his second year dealing successfully with the political backlash from the unions. Then, as the year came to a close, he endorsed, asked for, got and signed Right To Work legislation.

Now, as he starts his third year in office, Snyder has set his mind on road funding.

Supposedly the administration and legislature will look for $1.4 billion for road funding from existing resources. However, the handwriting appears to be on the wall. It’s a sure bet the legislature has no stomach for diverting $1.4 billion from government programs. In the end, the quest for road funding will take the form of tax or fee increases – possibly with a portion of the dollars coming from elsewhere.

Anyone who was at Snyder’s State of the State Address last week should have sensed that  Snyder and legislative leaders are all on the same page. What’s not clear is whether all the details have been ironed out – but most of the basic concepts probably have been.

However, attempting to get lawmakers to vote for significant fee, and or, tax hikes is a dicey proposition. Perhaps the administration and legislative leaders already have the votes lined up. Perhaps the measures they want will easily zip through the process.

Also, keep in mind that many portions of Michigan’s business community are in favor of raising fees or taxes for road funding. Considering that the business community is often the loudest faction that fights higher taxes and fees, its advocacy for passing new road funding measures could cause the legislature to do so quickly.

Yet, complications can arise – and usually do.

There’s an equal chance the effort to pass the legislation could be a rough trip - possibly even ending up with a detour. At this point we can make a pretty good guess that if the measures haven’t passed by April or May, that means they’re probably in trouble.

Both State Reps. and Senators will be running for re-election in 2014. This means that, by May, all of the lawmakers’ primary seasons will be only a year away. It should also be noted that voting for tax and fee hikes can potentially hurt Democrats politically as much as Republicans.

Last year, a plan to increase the fee for auto registration had bipartisan support. But a lot has happened since then. Will the Democrats be onboard this time? Maybe, but maybe not. Overall, they are probably in an very uncooperative mood. What’s more, they’d  love to be able use the fee and tax hikes against their their GOP rivals.

It seems unlikely that the Democrats would willingly give “yes” votes to Snyder for nothing. So, if enough Republicans lawmakers can’t be found to pass the road funding measures, some dealing and bargaining will have to take place. There’s never a better time for deal-making than during the budget process – which plays out in the early winter and spring. That gives us another reason to expect this issue to be pushed earlier, rather than later.

Something to watch for is a Plan A and a Plan B. This is a tried and true method of getting votes from otherwise reluctant lawmakers. It works like this. Snyder’s administration would introduce Plan A, with the intention of letting the legislature change it into a Plan B.

This allows the legislature – usually through individual lawmakers – to offer amendments that make the plan more palatable. Obviously, this lets the lawmakers to go back to their districts and say - “At least we stopped them from doing something worse.” In the end the final version of the legislation looks like a compromise. In reality, it’s basically just about what was being aimed for in the first place.

A term we’re already hearing a lot regarding the road funding issue is user-fee. The idea is that raising the gas tax or auto registration fees is somehow different from increasing other taxes. There is a conceptual argument behind this claim, but it’s really a distinction without a difference.

According to the user fee argument, those who use the roads are the only ones paying for the upkeep of the roads through gas taxes, auto registration, etc. So, hiking the costs of these (supposedly optional) taxes is just raising the user fees on them.

This is a tough argument to buy into, considering that virtually everyone has to use the roads. Everyone has to wear clothing as well. On that basis, shouldn’t the costs of washers and dryers and clothing soap be considered user fees also?

The user fee argument would be easier to swallow if all of the taxes Michigan levies on auto fuel went to road and bridge maintenance. But they don’t. The State levies a 6 percent sales tax on fuel purchases that mostly goes to education spending.

If Snyder’s Plan A on road funding were to include any diversions of that sales tax away from education – all bets would be off. Such a structural change could win support from  some conservative groups and Republican lawmakers that would otherwise oppose the plan. In addition, it could bring the Democrats to the table in a hurry.

Under that scenario, a  “compromise” deal that didn’t include changes to where the sales tax goes, might be a way the administration could get the Democrats to vote yes. Of course, this strategy would only work if the Democrats were convinced Snyder wasn’t bluffing.

All things considered, politically, a bipartisan vote would be better for the Governor and the GOP lawmakers.

If Republicans alone were to pass the tax and or, fee hikes, the Democrats can be counted on to constantly remind the voters about it again, and again. What’s more, the road repairs won’t take place overnight. Voters could get mighty testy if they’ve been hit with higher fees and taxes, but are still driving on bad roads.

Snyder might have already played the sales tax for education angle with the Democrats behind closed doors. If he has – and it worked – he’ll get the votes he wants. It is also possible that his plan will include sweeping structural changes that might totally transform all of the dynamics.

However, if the initial strategy (whatever it is) goes awry, a protracted battle over road funding might be in store. Should that turn out to be the case, things could get very interesting.

Jack Spencer is Capitol Affairs Specialist for Capitol Confidential, an online newsletter associated with the Mackinac Center for Public Policy (MCPP). MCPP provides policy analysis. The political analysis represented in this column does not necessarily reflect the views of the Mackinac Center.