News Story

Bill Would Ensure More Gas Tax Money Goes To Roads

Sen. Proos: ‘We can get 9 percent of road funding goal up front’

Legislation has been introduced that would ensure that a portion of the motor fuel tax available for discretionary use is counted toward the $1.2 billion Gov. Rick Snyder wants for road funding.

Senate Bill 6, sponsored by Sen. John Proos, R-St. Joseph, would earmark $100 million, or possibly more, to transportation funding in the 2013 budget.

"The intent of my bill is to make sure the portion of dollars our taxpayers and vehicle drivers pay at the pump, which is not constitutionally mandated to go elsewhere, will be used for our roads and transportation infrastructure," Sen. Proos said. "I'm convinced that most of the constituents in my district believe that's how it should be used.

"We're estimating that it would be about 9 percent of the $1.2 billion the governor is asking for," he said. "It could bring in as much as $130 million to $140 million annually. Obviously that will vary, depending on pump prices and some other factors."

Gov. Snyder said during his State of the State speech that road and infrastructure spending would be a priority this year. He is expected to release a roads plan soon.

Sen. Proos said some of the gas tax money has been going into the state's general fund and then, later, used for transportation, so the state can qualify for federal matching funds. He said he thinks that could happen again, but the purpose of Senate Bill 6 is to lock the funding in place to make sure it doesn't get used for anything other than transportation.

Earmarking that portion of the fuel sales tax for roads ahead of time would clearly identify the funding as transportation dollars. In addition, Sen Proos said, it should help simplify the often confusing process of doing the annual transportation budget.

"For years now we've ended up cobbling together dollars to get the federal match," he said. "It's really not a very good way of doing it. Under my bill, we'd be saying from the start, this money is going toward transportation.

"A lot of people don't realize that much of the sales tax on fuel is constitutionally mandated for specific uses. But the 40 percent that's not constitutionally mandated elsewhere should go to transportation."

The Snyder administration's reaction to Senate Bill 6 was less than enthusiastic.

"The governor is interested in having a broad discussion on transportation funding and coming up with solutions that will provide the necessary funding to maintain and improve the state's infrastructure," said Caleb Buhs, spokesman for the governor's office. "Rather than taking a piecemeal approach, it is time to look at comprehensive solutions and take the necessary actions."

Mackinac Center for Public Policy Fiscal Policy Director Michael LaFaive said more road funding dollars are needed. But he added that some approaches to getting the money are preferable to others.

"The roads need improvement," LaFaive said. "It is about time the state made it a priority. Raising taxes and fees associated with road use is smarter tax policy than say, a personal income tax increase. Any tax and fee increases, however, should be offset with spending and tax cuts elsewhere."

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

School District Late To Make Changes

Taylor School District has 20-year history of declining enrollment; hasn't cut spending to match

The Taylor School District is in danger of becoming a miniature Detroit Public Schools if it doesn't do more to cut spending in the face of a decades-long drop in enrollment, said Michael Van Beek, education policy director at the Mackinac Center for Public Policy.

Van Beek made his comments after reviewing the proposed 5-year contract the Taylor School Board and the Taylor Federation of Teachers tentatively agreed upon. The contract will be put to union membership to be ratified Feb. 6. The contract is a big part of how the district plans to eliminate a nearly $6 million deficit this year.

The deal also ensures that employees won't be able to exercise their right to opt out of the union and not financially support its activities until the extended contract expires.

Late last year Michigan became the 24th right-to-work state in the nation. The law gives workers the freedom to choose whether they want to be members of the union and doesn't result in their firing if they opt out for not paying dues or agency fees.

In response, many teacher unions across the state are trying to extend contracts or amend them with security clauses before the law goes into effect March 28. Doing so locks their members into long-term contracts and forces them to continue paying dues or fees to the union.

The Taylor School District's problem is that its enrollment has plummeted and it has not cut costs to match the reduction in students. In 1991-92, Taylor had 13,092 students. That number dropped to 7,790 in 2010-11.

In 19 of the past 21 years, the Taylor School District has had a drop in enrollment. In 2008-09, the district went from 8,889 students to 7,443 in 2011-12, a 16 percent drop.

Yet, School Board President John Reilly said he thinks the district can get back many of the students who live in the city of Taylor but don’t attend the district and also attract more students to a new cyber school.

That's why he said the district was able to offer back concessions to the teachers in the fourth and fifth year of the contract.

The contract states a teacher will take a 10 percent cut in 2012-13 and then get a step increase in 2013-14 with salaries frozen in 2013-14 and 2014-15, but then rise back up to pre-reduction levels in 2015-16 with another raise in 2016-17.

A Taylor teacher with 11 years experience and a master's degree would have made $68,528. That salary would drop to $62,888 in 2013-14 but eventually finish at $70,223 in 2016-17.

The Taylor district had a deficit of $5.9 million in 2011-12. It was in danger of losing its state funding had it not submitted a deficit elimination plan to the state by Feb. 1.

Jan Ellis, spokeswoman for the Michigan Department of Education, said they are reviewing Taylor’s plan and wouldn’t release it until the state either approves or rejects it.

"On a minor scale, this is Detroit Public Schools," Van Beek said, comparing Taylor to the state’s largest city that could not cut staff levels fast enough to match its loss of students. "That is what happened in Highland Park. That is what happened to Muskegon Heights."

Both Highland Park and Muskegon Heights were turned into charter public schools after the state appointed emergency managers to take over the districts.

Van Beek said it would have been better to just sign a one-year contract and get a better understanding of where enrollment will be than to lock in expenses for five years.

"They don't know what is going to happen with enrollment," Van Beek said. "They've got a 20-year history of steadily declining enrollment."

Taylor has made efforts to cut staffing levels. The district had 462 full-time general education classroom teachers (not including special education) in 2004-05, which dropped to 352 in 2010-11. Van Beek said that still didn’t match the drop in enrollment.

"It's not an easy thing to do, but you do need to downsize," he said.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.