Last week the U.S. House of Representatives approved, by a vote of 417 – 9, a $284 billion highway bill that would boost road funds coming to Michigan by an average of nearly $200 million over the next five years. In all, TEA LU (HR3) promises to provide over $1 billion more than TEA-21 delivered to Michigan for transportation funding.
House approval of this legislation is a step in the right direction. The key change in this year’s House measure is the adjustment of scope, which is the ratio of programs used in the minimum guarantee calculation compared to the overall bill. Last fall Congress considered a measure which held scope at 84%, thus negatively impacting the overall amount of money that Michigan and other states would have received in road funding. This year, however, the Michigan delegation and other donor state members of the House were successful in bringing TEA LU’s scope up to the current law’s 92.6% level.
The next step will be at the Senate Environmental and Public Works Committee where mark up is expected as soon as March 16. At that point, however, the bill is expected to be held up on the Senate floor until sometime after Easter. Some Washington insiders are suggesting the Senate may increase the overall funding of the bill to anywhere from $299 billion all the way up to $318 billion, which would mean serious negotiations are forecasted for the Conference Committee.
Ultimately efforts will continue to push the rate-of-return from 90.5% for every dollar sent to Washington to a minimum rate-of-return of 95 cents, although it is expected that the ultimate rate-of-return negotiation will end up at 92% minimum rate-of-return. This increase from 90.5% to 92% will also result in increased funding coming to Michigan over the course of the next five years.
We will keep you updated as further developments occur.
Diesel Parody Bills Introduced in the State Senate
Senator Switalski (D-34th District) has introduced Senate Bills 291 and 292, which modify the tax on diesel fuel. These bills would increase the diesel and motor carrier tax by 4 cents per gallon bringing the rate to 19 cents per gallon, which would create parody with the state tax on regular gasoline.
MITA’s position on this effort is that although the organization is supportive of any efforts to increase state funding for transportation, our message has been consistent that any efforts to increase the diesel tax at the state level should be combined with efforts to increase the state gasoline tax at the same time, thus allowing for debate on both issues at the same time rather than through separate efforts.
We will keep you posted with further developments on this issue as they occur.
Please contact Mike Nystrom at 517-347-8336 with any questions or concerns on the above issues.
Michigan Government Directory of the 93rd Legislature
The 2005-2006 Michigan Government Directory is now available through the MITA offce. If you would like a copy, please contact Janis Strang at 517-347-8336.