This diary is pretty straightforward: I'm asking DKos Michiganians to make their way to the polls tomorrow and vote yes in our special election to alter various tax rates in Michigan and increase road funding. Since I'm talking to progressives, I'll try to address the most common concerns I hear from fellow Democrats about the proposal.
If you live in Michigan and read a site like DKos you're probably plugged in enough to know the basics of this already: the short of it is "sales tax increase from 6% to 7% for road funding." You also probably know that the longer version is "a package of laws that shifts some taxes around, increases road funding, ensures warranties for road work, increases the Earned Income Tax Credit, fiddles with the School Aid Fund, and does a couple of other things." And finally, you probably know that long, complicated ballot proposals start off with a strike against them because people don't like long, complicated ballot proposals.
The polling for Prop 1 is lousy right now, but special elections on proposals are notorious for being hard to poll and dependent on turnout, which is why a motivated group of supporters can really make a difference here. What I mainly hear is that progressives might support the proposal but they're leery. Follow me below the orange pothole for a few comments addressing progressive concerns about Prop 1.
I do mean progressive concerns: I'm going to assume that as levels of taxation go, moving from 6% to 7% -- from slightly below to roughly matching our surrounding states -- isn't as big an issue for you as the effects of the package overall. So what do I hear about that from fellow Democrats?
"A sales tax is regressive." This is the number one concern I hear, and you bet your bunny a sales tax hits low-income voters harder than others. That's one major reason that the Democrats in our Legislature, realizing that they had leverage against a defecting no-taxes-ever Republican fringe, demanded an expansion of Michigan's Earned Income Tax Credit from 6% to 20%. The minority did its job -- they couldn't get a perfect law, but they made the law more palatable. The EITC expansion substantially mitigates the hit to low-income voters.
How much? Here's some simple modeling, admitting that I'm no economic or traffic expert.
Suppose that a Michigan citizen makes $30,000 a year and takes home $20,000. They spend half, $10,000, on non-sales tax items such as rent, utilities, and food. Of the remaining $10,000 they manage to scrape up $500 per year to save, and spend $9,500. This person would expect to pay $95 more in sales taxes on their purchases. Modeling of the gas tax suggests about 7 cents more per gallon at current prices, which if you drive 10,000 miles per year in a 25 mpg car will cost you $28.
The EITC varies, of course, but for most of its range -- which this taxpayer would fall well within, if they have one or more children -- it's in the hundreds and thousands annually. Tripling from Michigan's current 6% level to 20% of federal easily outpaces the sales tax hit. The lower-income the voter, more the expansion improves their position on net.
But suppose our taxpayer makes a bit more, a middle income, and doesn't qualify for the EITC. Call it double. An MDOT study, which is the one that tells us that the average driver in Michigan spends $357 in car repairs due to bad roads, also gives us figures from surrounding states: the lowest is Indiana, at $225. Suppose that road repair lowers our Michigan driver's cost to Indiana's level. That's a savings of $132 -- which doesn't quite defray a $180 sales tax hit, but certainly minimizes it.
And all of this is before the stimulative effects of spending an extra billion dollars on road repair, maintenance, and all the industry that comes with that. We're talking jobs, often in unionized industries, supporting major manufacturing sectors. They call us tax and spenders -- fine then, let's own it.
"They keep telling me there's no Plan B, but of course they'll come up with something." Sure they will. The problem is that the "they" coming up with "something" is going to be the same Republican-controlled Legislature that just had a new tax defeated. You think they're going to raise new revenue to pay for roads?
The current most likely alternative is the Bolger plan -- if you admit that the roads are bad and need new spending but don't have new revenue, basic arithmetic means the money comes from somewhere else. Just a little bit, you know, a salami slice off of higher education funding, a nip and tuck on Medicare, a pullback on environmental enforcement. Not enough to do everything the roads need, just enough to support the claim that you did something while spreading the pain around everywhere else.
(Bonus: I personally work at a public university. We already expect our budget to get cut due to such maneuvers if Prop 1 fails, so the Board of Control passed a conditional tuition increase in the pipeline to cover the loss of state support. Nothing drastic, just a percent more than expected. Just another slight tightening of the screw making it harder for the middle class to get ahead...)
"Opposition and support are both bipartisan, so this isn't really a progressive issue." Really? Take a look at the list of organizations for and against from the League of Women Voters summary of some of the top active groups:
Against:
Citizens Against Middle Class Tax Increases
Coalition Against Higher Taxes & Special Interest Deals
Concerned Taxpayers of MI
National Federation of Independent Businesses
Protect MI Taxpayers
For:
AFL-CIO
Business Leaders for Michigan
Detroit Regional Chamber of Commerce
Governor, and some Michigan Legislators
Michigan Environmental Council
Michigan League for Public Policy
MI Municipal League
MI Sheriff's Association
Sierra Club
Small Business Association of Michigan
Notice anything curious? The "against" groups are almost all single-issue groups that formed just to defeat this ballot proposal, barring the NFIB. Most of them seem to be opposed to taxation in general. The "for" groups are mostly pre-existing groups that have an honest desire to, in various ways, make Michigan a better place to live. If you place any value on judging a law by the company it keeps, meditate on that list for a bit.
"We can't keep holding our nose forever. If we hold fast, Michigan will realize how horrible our GOP majority is and elect a Democratic Legislature that will do it right." This Legislature has already given a Democrat plenty of arguments to make on the stump next year. While you're playing the long game, Michigan's roads and bridges are in an embarrassing, shoddy state of disrepair. It's not a very good long game either: really, what message would you take from a failure of Prop 1? "Voters wanted a more progressive tax regime," or "voters don't like taxes"?
Dems are in the minority in our lege right now. The minority did its job and got a compromise. The majority should have stood up and done its duty, but it was afraid of voting for a tax hike, so it tossed the job to us. Just because we're ticked at having to do someone else's work doesn't mean the work ought to go undone. Go out Tuesday and vote yes on Prop 1.