Incoming House speaker wants $2.8B shift to fix local roads

House Speaker-elect Rep. Matt Hall, R-Richland, pitched a $2.8 billion plan Friday to fix the roads and bridges.

The lawmaker wants to act on Gov. Gretchen Whitmer’s 2018 campaign promise by shifting existing tax dollars and expiring corporate handouts to roads.

“Everyone says they want to fix the roads when the cameras are on, but nobody has taken any real steps to do it these past two years,” Hall said in a news release. “The people are sick and tired of inaction and empty words.”

Since 2023, Michigan lawmakers have approved $4.6 billion in corporate welfare to select companies, Michigan Capitol Confidential has reported.

Michigan’s 2025 budget is a record $83 billion, but the roads here, especially county and local roads, are still falling apart.

Hall’s plan would allocate $1.2 billion of corporate income tax revenue to infrastructure, add $600 million in additional funding in 2026, and direct state gas revenue entirely to road funding.

The $600 million increase would come from three current earmarks: $500 million for the Strategic Outreach and Attraction Reserve Fund that pays for corporate incentives, $50 million for the Revitalization and Placemaking Fund, and $50 million for the Housing and Community Development Fund.

The SOAR and RAP earmarks are set to expire after the 2024-25 fiscal year.

Hall also wants to replace the 6% sales tax on motor fuel with a revenue-neutral increase in the motor fuel tax, which would exclusively fund infrastructure. This would yield about $945 million in additional resources, Hall said.

In 2020, Whitmer’s administration borrowed $3.5 billion in bonds to fix state highways, but that money didn’t repair county and city roads.

County road agencies maintain roughly 75% of Michigan’s road miles, which means 90,500 miles of roads and 5,900 bridges, according to the County Road Association of Michigan.

The governor’s office has not responded to a request for comment.

The focus on local road funding is welcome, Ed Noyola, chief deputy and legislative director of the county road association, told CapCon in a phone interview.

“This is a step toward a long-term, sustainable revenue source that we look forward to and we would love to participate in,” Noyola said.

Spending existing revenue on roads instead of corporate welfare would be a win for taxpayers, said Michael LaFaive, senior director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy.

“Corporate handout programs are demonstrably ineffective and expensive and come with huge opportunity costs,” LaFaive wrote in an email. “The billions wasted underwriting corporate bottom lines would be better spent filling potholes and fixing bridges.”

LaFaive cited research from the Kalamazoo-based W. E. Upjohn Institute for Employment Research that reports large subsidies for big corporations have ”starkly negative employment impacts.”