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Ballot campaign aims to boost business tax for roads

striped safety cones on a road
Steve Carmody
Michigan Radio
Road construction along I94 in Jackson County, Michigan (file photo)

A union-led petition drive is trying to increase the state’s Corporate Income Tax rate from 6% to 11%. The revenue would be used to fix roads.

Increasing the rate by 5 percentage points would generate about $900 million a year toward Governor Rick Snyder’s goal of $1.2 billion in new revenue for road repairs. It would also be a major change to the 2011 business tax overhaul engineered by Snyder and Republicans in the Legislature.

Union leaders say the package was too generous to corporations at the expense of middle-class taxpayers. They say Michigan’s road funding crisis make this a good time to re-visit the issue

“Reality is we need to fix our roads,” says Tom Lutz with the Regional Council of Carpenters and Millrights and part of the Citizens for Fair Taxes campaign. “They need to pay their fair share.”

Business groups say increasing the corporate tax would be bad for jobs and the economy.

“Michigan residents want to fix the roads,” says Michigan State Chamber of Commerce President Rich Studley. “But anyone who cares about job creation and economic growth should think long and hard before signing a misguided petition to impose a $900 million tax hike on Michigan’s job providers.”

But Governor Snyder’s spokesman says he’s willing to look at any plan to generate money for road repairs.

“Now is the time for everyone to take a look at whatever opportunities present themselves, see whatever plans are out there, and consider the strengths and weaknesses of all of them,” says Dave Murray.

A petition-initiated law is not subject to the governor’s signature or veto, but the fact that campaign is underway puts the corporate income tax into the discussions on road funding.

The petition form has been submitted to a state elections board for approval.

The campaign would have to gather more than 252,523 signatures of registered voters. That would put the initiative before the Legislature. If lawmakers failed to adopt the law, the question would go on the 2016 general election ballot.  

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.
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