On Thursday Gov. Rick Snyder, revealed a bold 2013-14 budget plan that seems to have both conservatives and liberals alike, not very happy. One group definitely seemed to be satisfied – the business community.
The plan will impose $1.2 billion in new taxes on motorists. The budget calls for a spike in the cost of gas, vehicle registrations, and hunting and fishing licenses. In the meantime, Snyder has pledged to make improvements to the state’s roads and wildlife areas, while expanding Medicaid coverage and early childhood education. The governor noted that the bond rating agencies will like his plan because it’s balanced, pays down long-term debt and adds $178 million to two state savings accounts.
Mark Griffin, president of the Michigan Petroleum Association, which represents fuel distributors, said to The Detroit News that Snyder’s proposal would hike the cost of a gallon of $3.50 gas to $3.64, leaving Michigan with the “worst gasoline tax in the country and the highest gas prices in the country.”
The gas tax hike would raise $728 million annually for roads, bridges and other infrastructure improvements.
“If you use the roads more, you should pay more,” Snyder said. “If you use the road less, you should pay less.”
Snyder’s budget also calls for increasing heavy truck and trailer registration taxes by 25 percent and increasing light vehicle registration fees by 60 percent to raise another $508 million annually.
“This is a really solid budget,” Snyder said to reporters on Thursday.
Rich Studley, president and CEO of the Michigan Chamber of Commerce, agreed, saying that fixing roads is a major priority and that the increases the budget sets out are in the form of user fees.
Still, “I don’t think anybody expects the budget to zip through the legislative process,” Studley said to the Detroit Free Press.
House Speaker Jase Bolger, R-Marshall, commended Snyder for a budget. He said to the Free Press that this “continues his commitment to be fiscally responsible,” cautioning that it was still up to the Legislature to “determine the best way to proceed.”
However, there are conservative lawmakers, who are dismayed with Snyder’s plan to expand Medicaid to include about 470,000 more uninsured low-income people under the Affordable Care Act, which he announced on Wednesday.
Democrats said the impact of the gas tax and vehicle registration hikes – estimated by Snyder to average about $120 per vehicle – will have an impact on low and middle income families.