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Michigan Puts New Road-Funding Tax Structure Up For May 5 Referendum Vote

December 19, 2014

nowakMichigan voters will have the final say on approving a deal between Gov. Rick Snyder and the Michigan Legislature to overhaul the state’s tax structure to fund road improvements at a referendum election on May 5, 2015. The plan is estimated to raise an additional $2 billion. 

The central feature of the plan would require a constitutional amendment to allow a one-percent increase in Michigan's sales tax that will raise $1.3 billion in new revenue. Michigan's sales tax rate has stood at six percent since voters approved Proposal A in 1994.   

The plan also would increase revenue through other sources, including:

How the funds would be spent  

The deal would raise an estimated $1.95 billion in new revenue, which would be allocated as follows (all figures are estimated):

No "Plan B"

The entire package is tie-barred to the passage of the sales tax referendum in May, meaning if that vote fails to pass, no alternative plan for road funding that will take effect. A constitutional referendum requires a two-thirds approval in the House and Senate. The House passed the joint resolution for the sales tax referendum by a 96-14 vote at approximately 2:30 am today. After hours of debate, the Senate mustered the votes to pass the sales tax resolution 26-12 at approximately 5:30 am this morning. 

Michigan voters will have the final say on whether a deal between Gov. Rick Snyder and the Michigan Legislature to overhaul the state’s tax structure to fund road improvements at a referendum election on May 5, 2015. The plan is estimated to raise an additional $2 billion. 

Gregory Nowak
+1.313.496.7963
nowak@millercanfield.com