GOV. GRETCHEN WHITMER delivers her State of the State address to members of the Michigan Legislature in Lansing on Jan. 24, 2024. (Andrew Roth/Michigan Advance)

Gov. Gretchen Whitmer on Monday unveiled her $3 billion “MI Road Ahead” Plan, her latest pitch for “fixing the damn roads,” which was her signature campaign promise during her first gubernatorial campaign in 2018.

Whitmer’s office touted the effort as “fiscally responsible, balanced, and sustainable,” proposing additional funding to the Michigan road repairs by ensuring gas tax revenue goes toward fixing the roads, cutting costs within the state budget, closing a tax loophole for marijuana and asking corporations to pay their share for using Michigan roads.

“Since day one, I’ve been focused on fixing the damn roads, and while I’m proud of the progress we’ve made, there’s still a lot more to do,” Whitmer said in a statement provided to the Michigan Advance.

“Today, I’m excited to introduce my brand-new plan that provides a long-term, sustainable solution to fix our roads so we can help more Michiganders stay safe on the road, save money, and get where they’re going faster,” Whitmer said. “My plan is fiscally responsible and balanced, with both new revenue and cuts so we can lower costs for families. I’m grateful to Speaker Hall for sharing this priority, and I look forward to working with him and both parties in the legislature to get this done.”

In 2019. Whitmer’s plan to increase the gas tax fell flat with the GOP-controlled Legislature and it was never enacted.

Road funding has been at the top of the list for Republicans, with Michigan House Speaker Matt Hall of Richland Township and House Republicans unveiling their latest road funding plan Jan. 16.

Of the $3 billion for road funding in Whitmer’s plan, $1 billion is explicitly set aside for investments into local roads, while another $250 million will be invested into local bus services alongside building new transit projects across the state.

While Michiganders currently pay a federal and state gas tax plus a 6% state sales tax on every gallon of gas, 25% of those funds are diverted away from road repairs. Whitmer’s plan would close that funding gap, bringing in $1.2 billion for roads, bridges and transit.

Her plan also aims to bring in an additional $470 million by putting an end to a loophole exempting the marijuana industry from the wholesale tax applied to other products such as cigarettes and tobacco.

Alongside $500 million in cuts to the budget, the governor also aims to bring in an additional $1.6 billion from large corporations and big tech companies that include Amazon, Meta and TikTok by asking these companies to pay their fair share for doing business in Michigan.

A representative from Whitmer’s office told the Michigan Advance the specifics for this plan were up for negotiation and that they are looking to work with Hall and Senate Majority Leader Winnie Brinks, D-Grand Rapids, on a final plan.

Hall’s 2025 road funding plan would set aside $3.145 billion in dedicated funding for roads, “without raising taxes.”

Similar to Whitmer’s proposal, Hall’s plan aims to generate $945 million by allocating all taxes paid at the pump to road funding. It would remove the sales tax on gas and replace it with “a revenue-neutral motor fuel tax, which goes entirely to roads. Drivers will see no difference, but roads will receive more repair funds,” according to a news release.

The bulk of the funding would stem from $2.2 billion from the Corporate Income Tax. It would free up additional funds by eliminating $500 million in older tax breaks provided through the Michigan Economic Growth Authority, which was abolished in 2012.

It would also free up $500 million by preventing spending on legislative special projects and halt a $500 million automatic deposit into the State’s Strategic Outreach and Attraction Reserve Fund, with future deposits to be approved by the Legislature on their merits and on a case-by-case basis.

Alongside another $600 million in ongoing general funds from higher than expected tax returns projected by the state’s consensus revenue estimating conference, it sets aside $100 million that was previously allocated toward two expiring corporate placemaking and community development funds.

“I appreciate Governor Whitmer’s joining the conversation on this issue and I look forward to working together to ensure Michigan drivers get the safe, reliable roads they deserve,” Hall said in a statement Monday afternoon, noting road funding was one of the very first priorities he raised after being elected House Speaker.

“Government spending has grown 43% since Gov. Whitmer took office, and our local roads still have not been fixed … Michigan families expect results — that’s why our plan focuses on real solutions, including prioritizing funding roads over funding corporate earmarks, making the most out of our current budget instead of raising new taxes and fixing local roads first. Roads and infrastructure are essential, and we must get this right,” Hall said.

With two plans on the table, the Michigan Infrastructure and Transportation Association, which represents a number of heavy construction companies and suppliers, demanded leaders take action to preserve road construction jobs.

“Michigan faces a funding cliff in 2025 as funds from the governor’s bonding program and the boost in federal infrastructure funds dry up. The state is already faced with a $3.9 billion infrastructure investment deficit that continues to grow as maintenance needs and inflation increase,” said Rob Coppersmith, the association’s executive vice president.

“It’s time for Michigan’s leaders to get together and get the job done. Michigan cannot afford to wait any longer. We look forward to seeing quick action in Lansing on a long-term, equitable and sustainable infrastructure plan that saves thousands of jobs and puts Michigan back on the right track,” Coppersmith said.

Michigan Public Transit Association Executive Director John Dulmes cheered the proposal.

“We applaud Governor Whitmer’s proposal to improve our state’s transportation infrastructure, including public transit,” Dulmes said. “This plan not only addresses the immediate funding crisis faced by local bus systems but also helps pave the way for more stable services and the development of new transit initiatives in our state to meet growing demands. We encourage the Governor and Legislature to redouble their efforts toward funding solutions for our entire transportation system.”

According to a press release, representatives of several local bus systems have raised alarms about a funding crisis, estimating that a fully-funded system would need $200 million annually in additional funding.

However, Senate Minority Leader Aric Nesbitt, R-Porter Township, took issue with Whitmer’s proposal.

“For six years, Gov. Whitmer has failed to introduce a real plan to fix Michigan’s roads other than a 45-cent gas tax increase and her unilateral maneuvering to rack up $3.5 billion on the state’s credit card because she refused to work with the Legislature,” Nesbitt said. “She’s already floated the idea of new taxes on Michigan drivers based on the miles they travel. Now, she wants to reach deeper into the coffers of Michigan businesses and impose unspecified fees and taxes that will surely trickle back down to consumers. The bottom line is that she has no real plan because she refuses to cut back on wasteful government spending.”

Nesbitt praised Hall’s proposal, saying “it invests in our crumbling infrastructure without taking more from struggling Michigan taxpayers.”

“I look forward to working toward a real road funding solution that doesn’t raise taxes on hardworking families and further drive up the high cost of living. Michiganders simply cannot afford any more of Gov. Whitmer’s respun failed tax-and-spend ideas,” Nesbitt said.

In an emailed statement, Brinks called Whitmer’s plan an “honest evaluation of the real costs of rebuilding and repairing our roads.”

“The governor, speaker, and I have all expressed a desire to find a long-term, sustainable solution and I believe that we can take this complicated issue that has plagued our state for decades and turn it into a major bipartisan win for all Michiganders,” Brinks said.

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