Proos: $440 Million Surplus “Great News”

WSJM – Radio

Jason Scott Reporting

Fiscal experts report revenues are exceeding projections, putting the state of Michigan in the black by $440-million. State Senator John Proos says this is great news, but also asks “where should the state spend it?”

Proos says the better than expected revenue number means efforts to revitalize Michigan are working, and the state remains fiscally responsible with taxpayer dollars.

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Snyder Signs Proos Bill Directing Gas Taxes to Roads

WHTC – Radio

The taxes collected by the state on gasoline sales will be put toward road work for the next year.  Governor Snyder has signed a bill sponsored by state Senator John Proos that ensures the roughly 100-million dollars in tax revenue from fuel won’t be moved to the state’s General Fund and spent wherever it’s allocated.  Proos says by making sure the taxes are actually spent where they’re supposed to be will help the state receive around 400-million dollars in federal matching funds for road work.

State Senate Bill Seeks to Score $400M in Fed Road Aid

By Karen Bouffard

The Detroit News

March 28, 2012

Michigan could provide the matching funds needed to tap an additional $400 million in federal road money this year under a bill passed by the Senate on Tuesday.

The bill would restructure how sales tax charged at the pump is allocated, ending a yearly scramble to come up with the matching money, according to Sen. John Proos of St. Joseph, who sponsored the bill.

If approved by the House and Gov. Rick Snyder, the bill would raise between $120 million and $136 million annually depending on the price of gas and how many gallons are purchased, Republican Proos said.

“This would be an annual support to achieving federal match as opposed to each and every year having to cobble together the money to get the federal match,” Proos said Tuesday. In 2011, federal road dollars available to the state totaled $1.9 billion.

The proposal came a day before the release of a study by the Road Information Program, a nonpartisan research group in Washington, D.C., that said the average Michigan household will save nearly $2,000 annually in transportation costs by 2022 if the state provides adequate funding for its roads, highways and bridges.

The Senate bill would earmark more of the sales tax on each gallon at the pump that goes to the State Trunkline Fund, which pays for state road projects. About $135 million that goes into the general fund annually would instead go to roads.

Under the state constitution, 60 percent of the first four cents collected under the sales tax goes to schools, and 15 percent goes to revenue sharing with counties and municipalities. About 18 percent of the remainder would be earmarked for state roads. Proposal A earmarks the last two cents for the School Aid Fund.

Lance Binoniemi, spokesman for the Michigan Infrastructure and Transportation Association, said the bill is a start but falls short of the $1.4 billion annually Snyder said is needed to maintain Michigan roads in their current condition.

“We’re encouraged by any increases to transportation funding in Michigan, … but we think it’s a small portion towards a bigger goal,” Binoniemi said.

The bill passed 26-11 in Senate, where Democrats opposed the measure because the bill will not increase funding for county and local roads, according to Bob McCann, spokesman for Senate Minority Leader Gretchen Whitmer of East Lansing.

It heads to the House for approval, and would also have to be signed by Snyder to become law.

Michigan Senate Approves Bill to Dedicate Part of 6-Percent Sales Tax to Road Repairs

By Dave Murray

Jackson Citizen Patriot

March 27, 2012

A portion of the sales tax would be earmarked for the state’s crumbling roads if a bill that cleared the state Senate Tuesday becomes law.

Senators overwhelmingly approved a plan to take a part of the 4 percent sales tax that now heads to the budget’s general fund and earmark it for roads with an eye toward landing more federal matching funds.

State residents pay a 6 percent sales tax, with 2 percent headed directly to the school aid fund and the rest is divided to other areas of the budget, including revenue sharing to municipalities.

Sen. John Proos, R-St. Joseph, said the plan would designate more money for roads without raising taxes at a time when families are struggling with high pump prices.

“Instead of it going to the general fund, which can be used for any number of priorities including overspending in the Department of Corrections in the last few years – of which that budget I chair – I’d rather see us do right by our constituents who believe that what you pay at the pump, those dollars go to roads.

Proos said the change would claim about $135 million for the roads from the general fund. Gov. Rick Snyder’s budget proposal already targets $119 million in general fund money for road projects, but Proos said that is intended as a one-year plan.

He’d rather not use Snyder’s recommendation, leave the $119 million in the general fund and come with other cuts to cover the $17 million gap.

Snyder has said it will take about $1.4 billion to maintain roads, and more for new projects, and has called for lawmakers to look at a variety of ways to raise money.

Revenue from a per-gallon gas tax and vehicle registration fees have dropped because the state has fewer drivers, and people still on the road are driving less and have more fuel-efficient cars.

That means there is less money available for repairs. The Senate Fiscal Agency points to reports that 28,000 miles of state and local roads in poor condition.

Senate leaders have floated the idea of a higher gas taxes, and Sen. Howard Walker has pushed the idea of a 1 percent increase on the sales tax dedicated to roads.

“Folks are having trouble with their own current state in life, and now they can’t afford to get to work. When see gas prices in Southwest Michigan at about $4.15 and going up, we have to question whether people can afford any tax increases,” Proos said.

But he said Walker’s proposal “makes some sense,” saying revenue will be boosted as the economy grows.

“These are tough issues, especially at a time when our schools are seeing the number of students in free or reduced-price lunch increasing on a daily basis, more and more kids coming in for breakfast, that’s indicative of our economic situation in Michigan,” Proos said.