A bill passed by the Michigan House named the Bolger Plan would phase out the current Michigan gas tax to a tax on the wholesale level instead. Part of the current gas tax goes toward funding schools and municipalities, which critics of the bill state funding would be cut. As reported by the Detroit News, Republican Rep. Dave Pagel cites the lack of new funding generated by the bill. It is a simple money in and money out issue. If the state needs to spend more money on roads, it needs to find more money elsewhere either through cuts or increased revenue.
Instead, the Bolger Plan banks on economic expansion to provide funding for schools and cities. The more the economy expands, more goods are bought (in this case fuel), and the more revenues are brought in at the same tax rate. Bolger even cites a clause in the plan that would revert to the current tax if school and city funding drops below the previous year.
This creates two massive flaws in thinking about funding schools with this tax. The first being the fact it only requires the funding to meet the previous year. The issue with thinking that way is the lack of accounting for increased cost. Schools, like anything, are institutions that incur cost. The clause in this bill always seeks to limit the funding back to the previous year not accounting for adjustments that may need to be made for proper school funding.
The other flaw is that it bases funding to be made up through increased economic growth. Not only is it fool hardy to hedge school funding on, at best, a slow recovering economy, there needs to be made public if the change in just one tax will produce an economic stimulus enough to make up the funding. If the economic growth does occur, it could also mean more students because more families may move to the state and more couples will feel more confident to grow their families. Are the projections for this tax change fully accounting for the dynamic growth and increased cost that may come along with economic growth?
The most obvious problem, though, with this bill is inherent in the need for the clause itself. Basically saying, if the money is not coming in from the new tax with the economic growth, then it reverts back to the current tax. It states itself that there is a substantial risk of the new tax failing to bring in the needed revenue. With issues as big as roads and schools, there is no tolerance for such a risk as possible failure. It is not a solution, but a hedging risk full of weary assumptions.
Funding for schools should not be a play on market trends, and neither should the funding for roads. It is not about finding a onetime down payment to fix the roads once, but a solution that solidifies proper maintenance so that future generations are not dealing with the same issue the state faces now. At the same time, the best investment for economic growth is an investment in people to have the skills and knowledge necessary for the complex global market.
The campaign rhetoric this past year focused heavily on these two issues. Fund the schools, and fix the roads. Both parties claimed that they would do this in their campaigns. Governor Snyder should publicly declare for any bill coming across his desk that puts school funding at even the slightest risk will receive a veto. Likewise, citizens should expect more from the representatives. However a reader may fall on this issue, she or he must expand this conversation so that a sensible solution is soundly implemented.