As if to prove the maxim that voters will always reject tax increases that they would have to pay, Michigan voters went to the polls last Tuesday to shoot down Proposition 1 – a massive $2.1 billion across the board gas, sales and use tax hike that supporters said would raise revenues to build roads and bridges.
And they rejected them by a whopping 60-point margin.
The 80-20 vote against Prop 1 – a state constitutional amendment that would have locked in tax hikes and allowed the state legislature to claim no power to repeal them – came despite a $9 million statewide ad campaign that supporters hoped would lead to victory on Election Day.
Grover Norquist, president of Americans for Tax Reform, called the vote a huge victory and compared the efforts of Gov. Rick Snyder (R) and other supporters to bully voters into supporting the legislation to a hostage situation. In a statement, Norquist said:
“The tax and spenders and their advocates in the media thought they had finally found the secret sauce: hold highway spending hostage to higher taxes…” “The verdict is now in from Michigan. A big No.”
Governor Snyder admitted defeat on Tuesday but said “doing nothing isn’t an option” for state road, bridges and other critical infrastructure. Snyder insisted that Prop.1 was a “bipartisan plan” before rattling off a list of big labor and “government knows best” constituencies that pushed hard for passage. In a statement, Snyder said:
“We appreciate that this bipartisan plan was supported by so many groups – business leaders and unions, public safety officials and local governments, teachers, and the list goes on.” “While voters didn’t support this particular proposal, we know they want action taken to maintain and improve our roads and bridges.”
Taxpayers didn’t buy it.
For starters, the $2.1 billion tax hike didn’t set aside revenues to fix potholes and upgrade roads and bridges – a now familiar ruse that doesn’t fly with voters anymore.
According to the Mackinac Center for Public Policy, only 61 percent of the taxes raised by the tax package would go to “infrastructure” – whatever that means. Of the remaining $700 million in new tax revenue:
“$300 million would go to public schools, $100 million to local government revenue sharing, and pledges for future spending on local bus and transit agencies…”
Whenever government talks about “public schools” and “pledges” to do this or that, voters see greedy teacher unions and broken promises. The tax increases overwhelmingly rejected by voters included:
- Raising the state sales tax from 6 to 7 percent,
- Hiking vehicle registration taxes,
- Increasing the state’s Earned Income Tax Credit for people who don’t pay taxes.
The burden on already overstressed taxpayers would increase taxes on an average Michigan household by between $477 and $525 in 2016 – money families living paycheck to paycheck simply don’t have.
According to the Ballot language that laid bare the true impact that Prop.1 would have the average taxpayers, the state constitutional amendment would, in part:
- Increase portion of use gas tax dedicated to School Aid Fund (SAF).
- Expand use of SAF to community colleges and career / technical education, and prohibit use for 4-year colleges / universities.
- Increase sales / use tax to 7%, as authorized by constitutional amendment.
- Increase gasoline / diesel fuel tax and adjust annually for inflation, increase vehicle registration fees, and dedicate revenue for roads and other transportation purposes.
- Expand competitive bidding and warranties for road projects.
- Increase earned income tax credit.
Clearly, voters in Michigan and other states where taxpayers are given a chance to vote on state constitutional amendments, ballot measures, state referendums, the answer will be no – by a margin of 60% of the vote in no uncertain terms.