Important Deadline Coming Up for May 5 Proposal 1 Ballot Question

Michigan residents who want to vote on the May 5 ballot proposal to fund improvements to the state’s roads must register to vote by Monday, April 6.

Proposal 1 would amend the state’s Constitution by raising the state sales tax from 6 percent to 7 percent.

While raising money for road repairs, the complex proposal would eliminate the sales tax on gasoline for the purpose of increasing transportation infrastructure funding.

The measure would affect other vehicle-related fees, increase spending for education and increase the earned income tax credit.

According to House Fiscal Agency estimates, the sales tax increase would generate more than $1.6 billion a year, with $1.2 billion going for road improvements, $130 million for mass transit, $300 million for school aid, and $95 million for local governments.

Specifically, the measure would do the following:

• Eliminate the sales and use tax on vehicle gasoline and diesel fuel.
• Increase the state’s sales tax from 6 percent to 7 percent.
• Dedicate 60 percent of the first 5 percent of the sales tax and an amount equal to 12.3 percent of the first 5 percent of the use tax to the School Aid Fund. Currently, 60 percent of the first 4 percent of the sales tax is earmarked for the fund.
• Provide for the School Aid Fund to be used exclusively for aid to “public community colleges, public career and technical education programs, scholarships for students attending either public community colleges or public career and technical education programs.” This removes aid to public institutions of higher education as an allowable use for the fund.
• Dedicate 15 percent of the first 5 percent of the sales tax to be used for revenue sharing with townships, cities and villages. Currently, 15 percent of the first 4 percent is earmarked for revenue sharing with local governments.
• Increase the fuel tax to 41.7 cents per gallon from 19 cents per gallon of gasoline and 15 cents per gallon of diesel.
• Remove the depreciation discount for annual vehicle registration fees.
• Create a $75 annual surcharge for electric vehicles and a $25 surcharge for hybrid vehicles.
• Allow municipalities to finance road projects through competitive bidding.
• Increase the Earned Income Tax Credit (EITC) from 6 percent to 20 percent.

Several local jurisdictions will have elections as well

More resources:

• Find your polling place.
• Read the ballot proposal here.