The Michigan Senate’s plan to find more money for road repairs was a $1.2 billion gas and diesel tax increase.

The State House’s response was to shift some current state tax revenue to roads, with no net tax increase.

Leaders from both sides came up with a "compromise," which was adopted in the predawn hours of Dec. 19: Increase state taxes and spending by $1.9 billion, of which just $1.2 billion goes to fix the roads, and the rest for other areas.

“It appears that everyone was at the table negotiating except the taxpayers,” said Leon Drolet, chair of the Michigan Taxpayers Alliance. “And the deal reflects that.”

The latest round of efforts to find more money to "just fix the roads" began on Nov. 13 when the Senate passed its plan to increase gas and diesel taxes by that $1.2 billion over six years, with no reduction in other state taxes or spending.

Three weeks later, the House approved a comparable fuel tax hike, but with the increase offset by no longer imposing sales tax on fuel purchases. This would have increased road funding with no net increase in taxes.

According to Gongwer news, House Speaker Jase Bolger said, "It takes two to compromise, and while I'm ready to compromise, it will take all parties to come to the table…”

The "compromise" that was adopted is a ballot proposal that represents a net tax hike of $1.945 billion, of which some 38 percent goes to spending that is unrelated to roads.

According to the House Fiscal Agency, $300 million of the tax increase will go to public schools, $95 million to local government revenue sharing and an additional $130 million in subsidies to local bus agencies. Another $260 million will be used for payments to low-income wage earners, a concession added to get votes from Democratic lawmakers, said Jack McHugh, legislative policy analyst for the Mackinac Center for Public Policy.

However, there’s a catch: The deal also includes an increase in the state sales tax from 6 percent to 7 percent, which must be approved by voters May 5, 2015. If voters say "no" then none of the above will go into effect. Lawmakers will have to start over.

The deal also includes a measure imposing sales tax on purchases from out of state internet and catalog sellers with Michigan-based affiliates, the so-called “Amazon tax.” This is not contingent on the ballot initiative passing, and is projected to extract an additional $60 million annually from Michigan retail customers.

A House Fiscal Agency summary breaks the deal down as follows:

• Sales tax increase (requires voter approval): $1.342 billion
• Internet sales (“Amazon”) tax: $60 million
• Net increase in tax on fuel purchases ($1.200 billion fuel tax hike, offset by a $752 million sales tax exemption for fuel purchases) : $448 million
• Increase in vehicle registration taxes: $95 million

Net tax hike: $1.945 billion.

The State of Michigan’s total budget, including federal money, has increased $4.5 billion in two years from $47.8 billion in 2012-13 to $52.3 billion in 2014-15. Excluding federal money, state spending from state taxes has risen from $27.8 billion in the fiscal year that ended Sept. 30, 2013 to $30.0 billion in the current fiscal year.

Under the package the House and Senate have passed, that amount would increase by $1.945 billion, but only if voters approve a sales tax increase on May 5, 2015. If voters decline, none of the other tax and spending increases will go into effect either (except for the "Amazon tax" on internet purchases).

“The one silver lining from this deal is they force this on the ballot,” Drolet said. "It gives citizens a chance.”

Gov. Rick Snyder, Senate Republican Speaker Randy Richardville and House Republican Speaker Bolger all praised the tax hike in a press release.

“I’m pleased that even with this compromise, the key principles the House Republicans fought for remain intact,” Bolger said in the press release. “It was vital to us that all taxes paid at the pump go to roads, because that was the structural flaw that led to this problem. We also have an opportunity to once again significantly reduce the state’s debt so that we aren’t leaving our kids and grand kids with unpaid bills. I wish we could have achieved all of this legislatively, but that is not legally possible. Dedicating the taxes paid at the pump to fixing roads while protecting the revenue streams to schools and local governments is only possible with the 7 percent sales tax option, and that option requires a vote of the people.”

Editor's Note: This article has been slightly modified to add information on the $1.9 billion increase. Also, the date of the election was incorrect.

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See also:

School Budgets Safe Under 'No New Taxes' House Road Funding Package

House Road Plan is Solid

Projections Show Schools Get Even More With Road Funding Shift

'Let's Make a Deal' Time on Road Funding?

Many people view the relationship between humans and nature as a zero-sum game: Our progress comes at the direct expense of the environment. Actually, that’s not the case.

Recently, we’ve been able to dramatically improve our standard of living while simultaneously leaving behind a cleaner environment. In fact, Michigan’s environment is arguably cleaner than it has been in more than 100 years.

Consider how clean our drinking water has become. In the early 20th century, waterborne infectious diseases such as cholera, dysentery and typhoid were leading causes of death, and typhoid epidemics annually sickened thousands in American cities. With technological leaps in filtration – now to the level of filtering microbes and chemical compounds, disinfection and water analysis – these waterborne illnesses have been practically eradicated in Michigan and the United States.

The water in our rivers, lakes and streams is also less contaminated than it used to be. Treated wastewater and storm water contain significantly lower levels of contaminants, as technology and control systems have advanced. Some wastewater treatment plants in Michigan discharge water of higher quality than their receiving streams. For example, the PARCC Side Clean Water Plant in Plainfield, Michigan discharges four million gallons of water per day into the Grand River that is of better quality than the river’s water. Other Michigan treatment plants can also produce effluents better than river water much of the time.

Wildlife habitats are improving, too. In a 2010 Detroit News article, Jim Lynch chronicled the repopulation of wildlife around Detroit, writing, “After decades of struggling to overcome the Detroit River’s polluted past, a variety of fish and bird species have re-established themselves ... [t]he budding osprey population is joined by increasing numbers of walleye, lake sturgeon and whitefish as well as bird species like the bald eagle and peregrine falcon.”

A similar phenomenon is occurring in Michigan streams, rivers and lakes. The Grand River has become a fishing mecca, with bounties of salmon, steelhead, brown trout, bass, catfish and walleye. According to a recent report, the combined sewer overflow pollutant loads in the Rouge River, which flows into the Detroit River, have been reduced by 90 to 100 percent during most events. Further, for the first time in decades, the fish consumption advisory for some species in Wayne County’s Newburgh Lake has been lifted.

In addition to this evidence, there is abundant evidence in plain sight that the environment has been steadily improving. Some can remember the days when oil sheens covered Michigan rivers and lakes, when coal-fired home furnaces produced black palls in our cities, and when industrial and municipal wastes were dumped on empty sites or in unsecured pits. These environmental scars have been virtually eradicated in Michigan.

One of the reasons many find it easy to believe a narrative that the environment is consistently getting worse is, somewhat ironically, due to human technological advances. Analytic devices that used to detect contaminants measured in parts per million are now able to find these materials in parts per billion, or even parts per trillion. This causes many to believe that conditions are worsening, judging that 1,000 parts per billion of a contaminant is worse than 10 parts per million, when 1,000 parts per billion is actually 10 times less than 10 parts per million.

Additionally, there were once only a handful of environmental advocacy organizations. But now there are hundreds whose fundraising is enhanced by being provocative rather than presenting a balanced assessment. Moreover, there is a radical element in this movement that is anti-consumer and in favor a society regulated by an “enlightened” few. For this element, evidence of environmental progress and technological advancements seem to be of secondary importance.

Finally, against the evidence of history, many believe that if we can’t instantly solve a problem today, then it will still be a problem next year and next decade. Dire predictions are often based on this misconception. But the fact is that technology keeps improving at an accelerating pace, making humans better able to meet the environmental challenges of tomorrow and beyond.

There are still environmental challenges of great concern: invasive species, occasional outbreaks of toxic algae and pathogenic microorganisms in water supplies, old and failing infrastructure, and micro-constituents from hormones and other drugs we put down the drain. These concerns should be addressed, but let’s not let them overshadow the improvements we’ve made. With more conscientious operating practices and improving technology, we don’t have to choose between economic development and the environment.

In a 2013 article entitled “Science Is About Evidence, Not Consensus,” Matt Ridley, who formerly authored the Mind & Matter column for the Wall Street Journal, wrote, “[I]t is the evidence that persuades me whether a theory is right or wrong, and no, I could not care less what the ‘consensus’ says.” There may at times appear to be a consensus that Michigan’s environment in under assault and deteriorating, but the evidence suggests otherwise. Michigan’s natural resources can be improved, protected, and remain a key component of this state’s economic future.

Thomas Doran is a member of the College of Fellows of The Engineering Society of Detroit and an adjunct professor of civil engineering at Lawrence Technological University.