It's Official: Michigan Infrastructure Needs More Tax Revenue


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The state of Michigan continues to fall on hard times economically. The Center on Budget and Policy Priorities estimates that the state's budget gap for FY 2009 is $472 million (nearly 5 percent of the state's general revenue fund), the automobile industry is on the verge of bankruptcy and the state's infrastructure isn't adequate to support the needs of Michigan residents. Last week the infrastructure issue was addressed head-on by the release of the Transportation Funding Task Force's report.

The blunt report sums up Michigan's infrastructure problems this way: "Michigan is approaching a crisis of infrastructure funding caused by steady erosion of purchasing power, continued inflation in materials costs, and a decline in fuel-tax revenues due to spikes in gas prices, reduced travel and a slow economy. The decline in revenues, and a corresponding increase in demand for travel alternatives, has exposed the inherent structural problems with the current means of transportation finance."

The Task Force outlined a menu of funding alternatives available including: increasing registration fees, adjusting the motor fuel tax, increasing the sales tax, and increasing the aviation fuel tax. Look here for the complete list. Anti-tax lawmakers will naturally balk at some of these options, but many others will be prodded by the budget crisis to consider options that had previously seemed politically difficult. They should delve deep into this report and focus on investing in Michigan's infrastructure. Task Force members rightly caution, "The one choice we cannot afford is to do nothing."

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