LANSING — Michigan lawmakers this week previewed their plans for the coming months as questions remain on how the state will spend its taxpayer dollars.
A House Republican road funding plan — House Bills 4180-4187 — would restructure fuel taxes to ensure the state revenue collected at the pump would go entirely toward roads and infrastructure.
“We’re going to take sales tax, move it over to gas tax, so then it is allocated to road funding,” said Rep. Tom Kunse, (R) 100th District, Clare.
According to the nonpartisan House Fiscal Agency, the plan would essentially shift more than $3 billion from the state general fund, which covers government spending not already directed to specific areas by law.
The plan would also have a limited impact on school funding, which receives close to $700 million from the current sales tax on gasoline.
The Republican plan would increase the amount schools receive from sales tax on other products, which they say would bring in about $750 million.
“We’re not raising taxes, but we’re not cutting any vital services to fund this plan,” said Rep. Pat Outman, (R) 91st District, Six Lakes. “We’re holding the school aid fund harmless, and we’re prioritizing one of our biggest needs right now, which is our road and bridge system.”
In the Senate, Democrats introduced a set of new economic policies they say would help working families.
“For far too many, raising a child has become a financial headache and a constant source of worry as they struggle to keep up with rising costs, and this has a profound impact on the health and well being of parents, our kids and our economy,” said Sen. Mallory McMorrow, (D) 8th District, Royal Oak.
The lawmakers proposed a $5,500 tax credit for working families with children under three years old, which they say would help ease the burden of childcare.
“This proposal would help parents keep more of what they earn in their pocket, making it easier for them to afford the everyday essentials, from diapers to daycare costs,” said Sen. Kevin Hertel, (D) 12th District, St. Clair Shores.
The credit would be in addition to the state earned income tax credit, which provides an average of about $800 for qualified taxpayers.
The plan would also expand RX Kids, a universal income program for pregnant women.
“When our families are having a baby is when they will be poorest in their entire lives, and that is the most critical time of child development. What happens in that brief window of the maternal infant period shapes your entire life course.”
The program would provide $1,500 in cash during a pregnancy, and $500 each month through the baby’s first year. The initiative started in 2023 and has distributed over $7 million in Flint and Kalamazoo, mostly to families under the federal poverty level.
The program has received some bipartisan support and recently expanded to the eastern Upper Peninsula.