A Significant Win on Transit Funding;
Voters will Ultimately Decide in May 2015
TRU is your transit advocate on this and other important issues that impact Detroit area transit.
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It has been quite a tumultuous week in state transportation funding, Supporter, especially the last 36 hours!
Thank you so much if you were one of the thousands of people who called, emailed, and visited your legislators to urge their support for transit!!
With your help, we won two critical battles:
- Getting transit fully included in the transportation funding package and
- Getting that bill package passed through the House and Senate!
Both were enormous struggles that we should feel very proud that we won.
However the war for transit funding is not yet over.
For the funding to be enacted, Michigan voters will decide in May 2015 whether to raise Michigan's sales tax to 7% from its current 6%.
IF voters approve the sales tax increase, THEN this package will provide:
- $1.2 billion a year more for road, highway, and bridge repair;
- $112 million a year more for buses, trains, and paratransit;
- $260 million a year more for low income working families through an increased Earned Income Tax Credit;
- $300 million a year more for school; and
- $100 million a year more for cities.
It is a very complex package that was pulled together through many hours of debate and following months and years of proposals and consideration. In the wee hours of this morning, the legislature passed 11 bills and two resolutions that will only go into effect if voters approve the sales tax increase on the May ballot. The package includes:
- An elimination of the sales tax on gasoline;
- An increase and shift in how the gas tax is collected, to a 14.9% tax, which will allow revenue to increase over time as prices rise;
- Setting the same tax rate on gasoline and diesel fuel;
- Paying down MDOT debt from 1990s-era projects;
- Increased fees on vehicle registration, especially for electric vehicles, hybrids, and very large trucks;
- Revisions in road warranties; and numerous other provisions.
This solution is far from ideal. This is not how we would have preferred to fund our transportation system. Problems include:
- It's a complex package that requires a statewide vote to implement. That will be a huge undertaking to educate and persuade voters and may fail. If it fails, none of the above funding comes into place and the legislature is unlikely to come up with another funding solution for many years to come.
- This May 2015 vote to raise taxes for transportation could make it harder to succeed in an August 2016 vote to raise taxes for regional transit. It can be done, but it will be even more challenging than anticipated.
- Sales tax is a regressive tax that hurts lower income people.
That said, this is a very important step forward and definitely should be supported. A few reasons:
- It will provide $112 million a year more for public transit across Michigan. Nearly half of that will come to the greater Detroit area! Approx $50 million will go a long way in improving and expanding DDOT and SMART bus service!!
- Michigan has not increased the funding rate for transit since 1987 and without this, is unlikely to do so for many years to come.
- Our roads, schools, and cities need the investment this package provides.
This is just a brief summary of the package and its challenges and benefits. The Associated Press, Detroit News, and other area media covered this in detail and other organizations are providing their thoughts on it.
You will hear a great deal more about this over the coming months from me and others, but that can wait until after the holidays.
Thanks again for any calls, emails, social media sharing, and other efforts you've taken to make this important progress happen. And have a wonderful holiday season!!
PS - You are subscribed to Transportation Riders United's email list. TRU is Detroit's nonprofit transit advocate, working since 1999 to improve bus service, remove barriers to rapid transit, and advocate for smart transportation investments
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