Whitmer threatens veto as Senate GOP strips gas tax hike from roads budget

Lansing — Democratic Gov. Gretchen Whitmer on Tuesday threatened to veto a Michigan Senate budget bill after Republicans stripped all potential revenue from a 45-cent-per-gallon fuel tax increase she is proposing to "fix the damn roads." 

The transportation budget advanced by a Senate appropriations subcommittee would instead “accelerate” $132 million in future road repair spending by completing implementation of a 2015 funding law signed by former Gov. Rick Snyder. 

The proposed budget bump is a far cry from Whitmer’s $2.5 billion gas tax plan, which would generate $1.9 billion a year in new road funding revenue and free up other money for K-12 schools. 

Senate Republicans oppose the governor's plan to raise fuel taxes 171 percent to 71.3 cents a gallon, which would give Michigan the highest rate in the nation. But they plan to develop an alternative long-term road funding solution independently of the budget.

“I don’t think there’s any credible government or association or business that plans a budget with money they don’t have,” said Sen. Pete MacGregor, R-Rockford. “I think this budget is a sound budget, right now, with the revenue we have coming in.”

Senate Majority Leader Mike Shirkey, R-Clarklake, has acknowledged the need for some new revenue to support Michigan roads, which are projected to continue deteriorating despite the plan signed by Snyder four years ago that included a 7-cent gas tax hike and registration increases. 

The Senate GOP hopes to unveil its own long-term road funding plan this summer, but the budget bill advanced Tuesday in a party-line vote is “cowardly,” said Sen. Rosemary Bayer, D-Beverly Hills.

“I think they’re being chicken, I really do,” Bayer said. “They are taking the cowardly way out and trying to avoid this, that fact that we need to raise money.”

Democratic lawmakers have not introduced any gas tax legislation to complement Whitmer’s budget proposal, but Bayer said she would “vote for a tax increase that gets us to where we have enough money to fix the roads.”

Lawmakers hope to complete their 2020 spending plan this summer. But Whitmer has said she will not sign a budget that doesn't include “real” plan to fix the roads, setting up a potential standoff ahead of the Oct. 1 balanced budget deadline required by the Michigan Constitution.

Michigan's deteriorating roads "are hurting business, tourism and motorists, and the public is demanding action," Whitmer spokeswoman Tiffany Brown said in a statement.

"The governor stands ready to work with the Legislature, but the Senate budget passed today won't do anything to actually fix the roads and could actually make things worse. If this plan reaches her desk, the governor will veto it."

Shirkey downplayed the Senate budget move in an afternoon interview on WJR-AM 760, emphasizing the reality that talks will continue. He agreed the state needs to “find and spend more money” on roads on a perpetual basis.

“People should be just comfortable and calm,” Shirkey said. “This is the first step of a multi-step process to prosecute a budget. There’s a lot of negotiations that take place.”

But it's clear that Whitmer's gas tax proposal is not going over well with the public despite her statewide promotional tour, Shirkey said. 

“The appetite for the citizens of Michigan to embrace that kind of change in gas tax is just non-existent,” he said, “and I believe over time, through the budget process and beyond, we’ll prove it unnecessary.”

The Senate transportation budget, now heading to the full appropriations committee for additional consideration, moves the process along and “actually moves forward a little bit from the $1.2 billion funding plan we did in 2015,” said subcommittee chairman Wayne Schmidt, R-Traverse City.

“The discussion of future road funding and additional dollars – that’s a separate issue,” Schmidt said, noting any final plan will be negotiated between Whitmer, Shirkey and House Speaker Lee Chatfield, R-Levering.

“We all have different ideas on how we should fund additional road projects. My job today was to pass a balanced budget and make sure our current revenues are spent properly, and that’s what I did," he said.

Michigan Department of Transportation spokesman Jeff Cranson said Whitmer’s road funding proposal remains “the best plan” to “get the pavement where it needs to be in the shortest amount of time and give contractors some sense of a sustainable future they can plan for.”

The Michigan House is expected to craft its own budget proposal and is working to develop an alternative road funding plan. Negotiations are expected to continue through summer.

A handful of business, education and agriculture groups that have backed Whitmer’s call for a major road funding bump criticized Tuesday's move by the Senate panel.

“While we are open to other solutions to resolving Michigan’s road condition crisis, we are not sure how the Senate budget advances that critical goal,” Brad Williams of the Detroit Regional Chamber said in a statement.  

“The governor has presented a bold plan to address the crisis. We look forward to legislative leadership’s proposal that will generate the revenue necessary to fix the roads and reconcile their plan with the governor’s.” 

But Annie Patnaude of Americans for Prosperity-Michigan praised the Senate decision, saying the upper chamber “did the right thing” by stripping the unpopular gas tax proposal from the transportation budget.

joosting@detroitnews.com