In the state of Michigan, the economy hasn’t been too great,
and their roads, schools, and local governments are paying for it. There is a
new proposition for the state that could turn this around. Now, keep in mind, I
am not from Michigan and I’ve never been there before. I don’t have any personal
experience with the economy and infrastructure in Michigan. I had to do some
research and read several articles about this particular issue.
The proposal is just mentioned is Proposal 1 of Michigan, to
be voted on by the people of Michigan on May 5th, 2015. The
proposal, if passed, would accomplish several things:
o
It would raise the sales tax one percent (from six
percent to seven percent).
o
It would raise the gas tax (possibly doubling
the tax over time)
o
It would raise vehicle registration fees and get
rid of special vehicle registration discounts.
o
It would raise the earned income tax credit for
low income families.
o
The revenue (a projected $2 billion) would fund mostly
the state’s transportation by building new roads and restoring existing roads (Figure 1).
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| Figure 1 http://www.mlive.com/news/flint/index.ssf/2015/04/michigan_roads_proposal_1_foru.html |
o
The revenue would also fund the School Aid Fund.
o
Community colleges and tech schools would be
able to use the School Aid Fund.
o
The state would introduce competitive bidding on
road projects.
With all of these points to consider, there are those who
are opposed to Proposal 1. Those who are against the proposal claim that 40% of
the additional $2 billion per year would go to the state’s special interests. The
average impact on each household per year would be from $450 to $500 in
additional costs. The Michigan Department of Transportation (MDOT) is in debt,
and those against the proposal fear all their money will just go toward the
MDOT debt. Raising taxes could negatively impact tourism. Many other bills are
connected to the proposal, which is also a lot to consider. One impact that
would be made, not specified in Proposal 1, but in a connected bill would
create an unelected Authority to handle the extra revenue. Those opposed do not
feel safe having an unelected Authority conducting their tax dollars.
Those who are for Proposal 1 have their reasons as well.
Those who want to vote yes on the proposal think that the benefits outweigh the
costs. The extra revenue would improve their roads and fund schools so their
children get a better education. Low-income families would be compensated
through tax credit for the additional strain on money. Also, a portion of the
funding would go to local governments and help pay for the salaries of
policemen and firefighters. Raising the tax by only one percent isn’t too much
for those for the tax, and they think it’s a great way to improve their future.
After looking at both sides of the issue, as a civil
engineer (in training) I believe it is in Michigan’s best interest to vote yes
on Proposal 1. It’s true that a significant chunk of the extra revenue would
not go to roads, but that 40% includes the School Aid Fund and other good
causes. The average impact on each household might seem large, but spread
through out a whole year makes the impact only $37.50 to $41.67 more each month.
For some families this might make things tight, so the proposal also raises the
earned income tax credit for those low income families. This would help
compensate for the additional $40 a month. There’s a lot of good that could
come from this proposal for raising the cost of a few things (tax, gas, and
vehicle registration). The additional $2 billion will go a long way in improving
the future and infrastructure of Michigan. Engineers always try to look for a
brighter future for the public.
Interesting article. I think infrastructure issues and the negligence of maintenance that we've had towards it throughout the US will start to become a much more prevalent issue, and this seems like a highlighted case in Michigan. If we don't start to make changes and try to fund maintenance there will be more cases like the 35W bridge collapse across the US. At first I was opposed to the statutes of the of the proposal because I misread your bullet points. I thought it was going to increase the income tax on low income families, but then I noticed the keyword CREDIT. So yes, I do believe that increasing the sales tax slightly as well as some other taxes is a good way to fund what seems to be a very pressing issue in Michigan.
ReplyDeleteInteresting article. I think infrastructure issues and the negligence of maintenance that we've had towards it throughout the US will start to become a much more prevalent issue, and this seems like a highlighted case in Michigan. If we don't start to make changes and try to fund maintenance there will be more cases like the 35W bridge collapse across the US. At first I was opposed to the statutes of the of the proposal because I misread your bullet points. I thought it was going to increase the income tax on low income families, but then I noticed the keyword CREDIT. So yes, I do believe that increasing the sales tax slightly as well as some other taxes is a good way to fund what seems to be a very pressing issue in Michigan.
ReplyDeleteI personally am not a fan of increasing taxes, but someone has to pay to keep the state going. The money going to construction projects to keep up with road maintenance and school funding are a necessity for a productive society. The only real problem with the proposal is the politics. As you stated the opposed are leery of having an unelected official to use the excess revenue. I don’t like the idea of this either. This is the whole problem, in my opinion, with every bit of government. Proposal 1 sounds great from all the points you gave. It would fix the roads and help the schools out, which is great and basically what the creators want you to hear. The left over funds or 40% of the 2 billion going to whatever some person chooses is an issue. I will never understand why someone can’t seem to pass a bill without fine print and underlying motives. Obviously something needs to be done and I feel that if they have that much excess, why are they increasing the taxes so much? The excess money might even go to a good cause, but it seems like half the time in these situations it goes to funding bias interests or projects that are not a necessity. These side projects all add up and contribute to why the government is broke already.
ReplyDeleteI completely agree with your assessment of the situation in Michigan. Because the state is currently not making enough money to keep all its programs and responsibilities in food working order, I think they need to do something. I think it is important to look at the negative, the increased cost in sales tax, and the positive, improving the quality of many government programs which people rely heavily on. After examining the two alternatives I think you need to realize that a 450 dollar increase in expenses for someone is going to make a minimal difference in their lives, especially when it is broken up over hundreds and thousands of transactions. The few hundred dollars would only significantly impact leisure money for most families. Improving the education system and infrastructure are long term, high yield investments, that in the long run, could pay huge dividends for the state. Bushiness will invest more in Michigan if the infrastructure is in good shape, as it reduces their costs. Residents who are better educated is hugely important in the long term as well. People who have strong educations tend to make much more money, as well as be better citizens, (lower crime rates, healthier). This is what is going to make a difference in the future of Michigan, not a few hundred more dollars to spend in your leisure time. It is also important to note that because it is a tax percentage, people with less money and spend less money do not get hit as hard with the tax, so will struggle with it less than they might have.
ReplyDeleteI completely agree with your assessment of the situation in Michigan. Because the state is currently not making enough money to keep all its programs and responsibilities in food working order, I think they need to do something. I think it is important to look at the negative, the increased cost in sales tax, and the positive, improving the quality of many government programs which people rely heavily on. After examining the two alternatives I think you need to realize that a 450 dollar increase in expenses for someone is going to make a minimal difference in their lives, especially when it is broken up over hundreds and thousands of transactions. The few hundred dollars would only significantly impact leisure money for most families. Improving the education system and infrastructure are long term, high yield investments, that in the long run, could pay huge dividends for the state. Bushiness will invest more in Michigan if the infrastructure is in good shape, as it reduces their costs. Residents who are better educated is hugely important in the long term as well. People who have strong educations tend to make much more money, as well as be better citizens, (lower crime rates, healthier). This is what is going to make a difference in the future of Michigan, not a few hundred more dollars to spend in your leisure time. It is also important to note that because it is a tax percentage, people with less money and spend less money do not get hit as hard with the tax, so will struggle with it less than they might have.
ReplyDelete