Susan J. Demas: Michigan deserves great schools and roads. It’s time for a graduated income tax.

June 19, 2019 6:45 am

Lansing road work | Susan J. Demas

It’s been more than 100 days since Gov. Gretchen Whitmer came up with the most business-friendly solution to fix the roads and start to repair schools.

Lt. Gov. Garlin Gilchrist and Gov. Gretchen Whitmer at a Capitol rally for public schools, June 18, 2019 | Derek Robertson

After years of recession and Republican disinvestment, we have the worst roads in the nation. No state has spent less on education than we have in the last quarter-century.

This drives away new businesses and college graduates. And moreover, it’s a complete embarrassment that Michigan — the state that put the world on wheels — can barely take care of core functions.

So the new governor proposed $500 million more for education and a 45-cent gas tax hike to generate $2.5 billion every year for roads.

Whitmer’s plan was endorsed by groups including the Detroit Regional Chamber of Commerce. That’s because they’ve long-subscribed to the idea that infrastructure improvements should be paid for by “user fees” like fuel taxes and vehicle registration fees. Businesses know that having decent roads and bridges is critical to attracting investment and talent to Michigan — and it doesn’t come cheap.

And what they really don’t want is for their corporate taxes to rise.

Susan J. Demas: Business leaders should call GOP’s bluff on Whitmer’s gas tax

Even the Michigan Chamber of Commerce, which essentially operates as an arm of the state Republican Party, subscribes to the “user fee” idea. At the Mackinac Conference for Public Policy, CEO Rich Studley even inveighed against the “unicorn caucus” who believe that infrastructure can be fixed with “fairy dust and wishful thinking.”

That’s usually enough to persuade Republicans who run the Legislature to do something, but there’s been zero serious movement.

Instead, they’ve thrown out asinine non-solutions for roads like selling off the Blue Water Bridge (a unicorn-like plan that sounds straight out of the Onion) and siphoning off money from schools (their favorite punching bag).

Meanwhile, the gas tax hasn’t gone over well with citizens, probably because they’ve endured years of tax increases from GOP former Gov. Rick Snyder and President Donald Trump, who were only interested in rewarding their corporate donors.

So Michiganders have embraced some unicorn-like ideas of their own, from a kayak tax (how such a niche hobby would generate $2.5 billion for roads defies logic) to the most popular non-solution, pot for potholes.

Yes, recreational marijuana is now legal in Michigan. No, it will never produce enough money to fix the roads, especially as the problem gets worse with every month of non-action.

Getty Images

As we reported just after Whitmer unveiled her roads plan, recreational marijuana is projected to bring in $43 million in tax revenue in 2021, according to the nonpartisan Senate Fiscal Agency.

A report from the Anderson Economic Group generously says that legalized pot could generate $225 million by 2023 — but considering that Illinois is about to follow suit and provide hefty competition, I wouldn’t bet the cannabis farm on that.

Whitmer tried to put this in perspective last month, noting that “every man, woman and child would have to smoke about $2,500 worth of marijuana per year to fix our roads” and “at that level, no one is going to care about the damn roads.”

Naturally, the internet took it as a challenge. But alas, the valiant effort of generous potheads still won’t be enough to fix our roads.

Gov. Gretchen Whitmer speaks at the Mackinac Policy Conference, May 29, 2019 | Andrew Roth

So people don’t like the gas tax, Republicans refuse to do their job and marijuana won’t magically solve our problems.

What do we do now?

It’s clear that the only way to ensure that Michigan becomes a functional state again is to tax the rich. We’ve long needed to modernize our tax code with a graduated income tax.

New polling shows that 76% in Michigan now support a graduated income tax. That means that even many Republicans are A-OK with soaking the rich, which should give GOP leaders night terrors.

That’s because this isn’t radical policy. We’re one of only nine states that don’t have a tax system in which those who make more money pay a higher rate. Whitmer told me last month that she’s always supported the concept, but she, of course, still wants a road-funding plan passed this year.

Poll: Strong support for graduated income tax

House Democrats have legislation that they’ve wisely dubbed as the “Fair Tax.” It would result in an extra $2.5 billion a year — which, coincidentally, is what’s needed to get our roads in shape.

So what’s the catch?

Well, conservatives who helped draft our 1963 Constitution barred a graduated income tax, so it will take a constitutional amendment at the ballot box (as the GOP-controlled Legislature would probably legalize cannibalism before it would raise taxes on wealthy donors).

Late winter potholes in Lansing | Susan J. Demas

And we wouldn’t see this until 2020, which means our infrastructure and education problems will only get worse (and more expensive). But since Whitmer doesn’t really have a negotiating partner in Republicans, it’s time to start planning ahead.

Now conservatives loudly insist a graduated income tax will never pass, because it’s failed on the ballot before. But the last time was in 1976 — the year I was born, and I am 42.

It’s safe to say that a lot has changed since bell bottoms and Jimmy Carter were all the rage. And it’s time for our roads to stop looking like they were last paved in that decade.

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Susan J. Demas

Susan J. Demas is a 21-year journalism veteran and one of the state’s foremost experts on Michigan politics, appearing on MSNBC, CNN, NPR and WKAR-TV’s “Off the Record.” In addition to serving as Editor-in-Chief, she is the Advance’s chief columnist, writing on women, LGBTQs, the state budget, the economy and more. Most recently, she served as Vice President of Farough & Associates, Michigan’s premier political communications firm. For almost five years, Susan was the Editor and Publisher of Inside Michigan Politics, the most-cited political newsletter in the state. Susan’s award-winning political analysis has run in more than 80 national, international and regional media outlets, including the Guardian U.K., NBC News, the New York Times, the Detroit News and MLive. She is the only Michigan journalist to be named to the Washington Post’s list of “Best Political Reporters,” the Huffington Post’s list of “Best Political Tweeters” and the Washington Post’s list of “Best Political Bloggers.” Susan was the recipient of a prestigious Knight Foundation fellowship in nonprofits and politics. She served as Deputy Editor for MIRS News and helped launch the Michigan Truth Squad, the Center for Michigan’s fact-checking project. She started her journalism career reporting on the Iowa caucuses for The (Cedar Rapids) Gazette. Susan has hiked over 4,000 solo miles across four continents and climbed more than 70 mountains. She also enjoys dragging her husband and two teenagers along, even if no one else wants to sleep in a tent anymore.