Recently, Governor Jennifer Granholm introduced her 2006-07 Executive Budget Proposal, which included the MDOT Transportation Budget. This budget proposal includes an increase in the road and bridge program due to increased federal funding and a significant number of projects from the Jobs Today Initiative ($418 million in accelerated projects).
The budget debate will also once again include a fight over inter-department grants (IDG), which are used to help balance various state agency budgets. These “raids” on the Michigan Transportation Fund (MTF) continue to be a focus of MITA's political agenda. Fortunately, MITA's message on this subject is beginning to take hold in Lansing, and legislation has been introduced in both the House and Senate to limit the IDG to the Department of Treasury to a maximum of $5 million per year, much like the Secretary of State is limited to $20 million per year in another state law. If this legislation ultimately becomes law, this will be a significant success in MITA's efforts to reduce and limit the use of IDG's, in that, last year's Treasury IDG was $8.6 million, thus saving approximately $3.6 million for the MTF.
We will keep you updated on the entire budget process and this legislation in particular.
Concerns Over Getting Rid of “Old Blue”
Legislation is being considered in Lansing that would replace all of the “old blue” Michigan license plates with updated reflective license plates. These plates are the only non-reflective plates that are left in any state across the nation.
The challenge, however, is to replace these license plates during tight budget times. Certain legislators are looking to the MTF as the upfront funding source for this change. Based upon initial estimates the cost to replace every “old blue” license plate that still exists in Michigan would be an $11 million hit to the MTF.
It has been suggested that by eliminating these older outdated license plates, the MTF will ultimately benefit over time. However, staff at MITA is continuing to investigate this claim in order to make sure this change does not negatively impact those funds that are available for transportation projects. One suggestion that has been offered is to include a fee of approximately five dollars on every one of these replaced license plates in order to pay the cost of this update, while holding the MTF harmless.
MITA will continue to hold firm on our position of opposition until all the information is clarified. Again, we will keep you updated on this legislation.
Alternative Fuel Tax Reductions Being Considered
President Bush mentioned alternative fuel tax reductions in his State of the Union. Major car manufacturers advertised them during the Super Bowl. And you will be seeing more and more about alternative fueled vehicles as time goes by.
What does this mean to the construction industry? It means that most new fuel sources start out with tax incentives to help get the new concept up and running. With that said, legislation has been introduced in Lansing that will offer up to $2.5 million worth of tax reductions for anyone purchasing E85 (ethanol) fuel or bio-diesel fuel. The idea is to offer a 7-cent/gallon reduction on the regular fuel tax and a 3-cent/gallon reduction on the diesel fuel tax per gallon. Elected officials feel that this will motivate the driving public to lean towards buying these hybrid fuels.
The concern for the construction industry is that if these tax incentives will negatively impact road funds in our state. Currently, the MITA staff is working with those who are interested in pushing for this legislation to make sure that appropriations are made back to the MTF to offset any tax incentives that would be given.
We will keep you updated as this legislation begins to move forward.
Sex Offenders and the Construction Industry
Recently, several members have contacted MITA regarding the fact that they are being requested to fill out paperwork for each and every employee that is set to work on a public school construction site. The paperwork includes doing background checks through both the FBI and the State Police, and to do fingerprinting of each and every employee that is likely to set foot on a public school construction site.
This requirement has come about due to a recently enacted law that requires all employees that are working within 1,000 feet of a school to have background checks done to confirm that they are not on the statewide sex offender list. At the time that this law was proceeding through the legislature, no one anticipated how it would impact our industry since it was considered to be focused specifically on school employees.
Nonetheless, under the current law several member firms have complained that even though a school has not yet been built, they are required to follow through with the bureaucratic red tape. The intent of the law was to protect innocent children in Michigan public schools from sexual predators who may enter the school buildings. Those individuals working in the heavy construction industry on land balancing and site work prior to a school being built were not intended to be included in this law. Therefore, MITA is working with a group of other interested industries to amend this law and thus, reduce the paperwork burden on our industry when working on public school projects.
We will keep you updated.
Water Withdrawal Package Heads to the Governor
The heavily debated water withdrawal package of legislation that recently worked its way through the legislature is now sitting on Governor Granholm's desk and is expected to be signed into law in the very near future.
This legislation, which was intended to protect the Great Lakes Basin from withdrawal to other states, was a very heavily debated topic over the past couple months in Lansing.
Ultimately, the language in the legislation was worked through to make it acceptable to nearly all parties involved in the debate. Business groups, including MITA, supported the legislation due to the fact that it gave protections with regard to interpretations coming from the Michigan Department of Environmental Quality (MDEQ). It was also supported by several environmental groups because it does offer protections for the future of Michigan's waterways.
With regard to the construction industry, language was included in this legislation that protects dewatering and aggregate pit operations from additional permitting requirements.
Please contact Michael Nystrom, Vice President of Government and Public Relations at MITA (517-347-8336) with any questions or concerns pertaining to the information mentioned in this bulletin.