Voters Rejected Proposal 1, So What’s Plan B For Michigan Roads?

LANSING (WWJ) Now that voters have defeated Proposal 1, the governor’s hard-fought attempt to raise the sales tax to fund Michigan road repairs, what’s the next move?

Everyone agrees local roads are in dire condition, costing drivers thousands of dollars a year in repairs. But no other plan has emerged for a vote that would take care of the issue.

Enter local lawmakers, who are scrambling for solutions.

“This is not going to go away,” Republican House Speaker Kevin Cotter said live on WWJ, adding he’ll present a plan in the near future that will involve tax credits.

State Rep. Peter Lucido, R-Shelby Township, told WWJ legal analyst Charlie Langton he wants to tap the state’s catastrophic fund, which has $20 billion in it, to fund road repairs.

“I’d like to just scrape the interest off,” he said, adding that would bring in about $1 billion.

The purpose of the catastrophic fund is to aid those who suffer catastrophic injuries in car crashes. “Those victims, should, and will, be taken care of, but my God, $20 billion,” Lucido said. “Keep the principal, just give the interest.”

Lucido plans to introduce the bill today in Lansing.

The complex Proposal 1 would have generated about $200 million a year for schools; $116 million for transit and rail; $111 million for local governments.

According to the Michigan Catastrophic Claims Association fund, which assesses Michigan motorists a $186-per-vehicle fee as part of the state’s no-fault insurance system, the MCCA is a private, nonprofit association. All of its dealings are with insurance companies, not the general public.

Every auto insurer in Michigan pays its share of the MCCA assessment, based primarily on the number of vehicles it insures. A board of directors is made up of members from Michigan’s highest volume insurers.

Steven Gurston of MichiganAutoLaw.com wrote a blog this spring saying it would be a terrible idea to raid the catastrophic fund to pay for road repairs.

“The MCCA’s not in the business of making loans or giving away money to fix the problems that lawmakers’ intransigence has prevented them from fixing,” he wrote.

He added the money in the fund is collected from insurance companies for one purpose only — to help people who were catastrophically injured in an auto crash.

 

 

 

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