Whitmer wants to tax large companies, pot to fix potholes

Gov. Whitmer proposed a long-term road funding plan that includes hiking marijuana taxes, imposing more taxes on large corporations, and cutting about half a million dollars in spending.

The two-page plan says it will levy $1.6 billion by requiring large corporations and big tech “to pay their fair share.” It is unclear which large corporations would be taxed and what spending would be cut.

The plan’s funding hinges on redirecting $500 million in unspecified costs to fix the roads.

Whitmer wants to add the wholesale tax, applied to smoking products like cigarettes, to marijuana. She says that using pot revenue to fix potholes would add another $470 million.

Those three changes would raise about $2.6 billion in revenue. Whitmer also wants to spend $250 million on local bus service.

“Michiganders deserve world-class transit, roads, bridges, and infrastructure,” Whitmer’s road funding plan said. “Let’s work together to fix the damn roads for good and build a brighter future for every Michigan family.”

About 87% of the Michigan companies that pay the corporate income tax have fewer than 100 employees, according to the Michigan Chamber of Commerce.

“Fixing our state's outdated roads and bridges is a key priority for Michigan Chamber members, but not at the expense of our small businesses and our state’s economic competitiveness,” said Wendy Block, senior vice president of business advocacy for the Michigan Chamber, told Michigan Capitol Confidential in an email. “That’s why raising the corporate income tax (CIT) is simply not a viable solution. We look forward to having this critical discussion and policymakers enacting a bipartisan, long-term, fiscally responsible investment plan.”

Michigan’s corporate income tax rate is already higher than the rate of half the states, including Ohio and Indiana. About 16 states have cut their corporate income tax rates since 2018, Block added.

Michiganders don’t need new taxes, said state Rep. Ken Borton, R-Gaylord.

“These taxes could include businesses, retail delivery services like Lyft and Uber, towing, heavy truck parking, and internet advertising,” Borton said in a news release. “It seems like she decided to put a tax on whatever came across her stream of consciousness during whatever planning process she made time for on her book tour. Our proposal would put more money toward our roads and do it without raising taxes.”

Republican lawmakers support a separate $3 billion road funding plan that does not call for raising taxes. The plan would pull $1 billion from subsidy programs, $600 million from the general fund, $500 million from legislative earmarks, and $500 million from the corporate attraction fund. It would dedicate all taxes paid at the pump to fixing the roads, which is expected to raise $945 million each year for local roads.

Whitmer’s recommendations for a $83.5B state budget include funding for 800 new state employees and $1 billion more in spending. It does not suggest a funding mechanism for fixing the roads.