Capital News Service

of the Michigan State University School of Journalism

Snyder proposes big cut in state aid to libraries

By YANAN CHEN

Capital News Service

LANSING—Michigan may cut state aid to libraries by 40 percent next year, in addition to cuts in state money for local schools and public universities.

Gov. Rick Snyder’s budget proposal would cut support to libraries by $2.3 million for 2011-12.

“It’s an urgent cut,” said Gretchen Couraud, the executive director of Michigan Library Association. “We have seen a 40 percent cut this year, but a 76 percent cut since 2000.

“The 11 regional library cooperatives will close in two years because of this cut, and people in those cooperatives will lose their jobs,” she said.

In addition, people rely on libraries as resources to find jobs, Couraud said.

“People now are worried about a 15 percent cut to public universities,” said Couraud. “But libraries are 40 percent.”

And she warned that some libraries may be forced to close for budget reasons.

Meanwhile, Snyder’s plan includes $950,000 to support the Michigan eLibrary.

The Michigan eLibrary is an online catalog that allows users to borrow from more than 43 million items such as books, audiobooks, music and movies and have them delivered to participating libraries. The system covers more than 400 state libraries.

As for the proposed e-Library funding, Couraud said, “It’s a wonderful thing. We are grateful for the governor for recognizing the value of the eLibrary and put it in the budget for the first time.

“People need the e-resources and it should be funded,” she said.

Nancy Robertson, state librarian at the Department of Education, said, “State aid is providing only a small portion of public libraries’ budgets.

“Although they will feel the cut, it’s not their main source of income,” she said.

“It will have a little bit of an impact on library collaboration,” Robertson said of Snyder’s proposal.

But Tara Conaway, the director of Flat River Community Library in Greenville, said, “This kind of cut will hurt the small libraries. There are growing needs for people under this bad economy to use libraries.

“Some people told me they cannot afford the Internet, so they come to us for help. They come to our libraries to apply for employment and do other things on the Internet,” she said.

Conaway also said, “We understand that at this time the governor needs to have a choice in what to cut, but we don’t think it’s wise to cut something that people stand for.”

Gail Parsons-Doughty, assistant director for human resources and finance at the Traverse Area District Library, said libraries are losing revenue from other sources as well.

Her library’s budget won’t be affected too much by Snyder’s plan.

“We will have $36,000 from state aid and we have a $4.7 million budget, so it is a small percent of our budget,” Parsons-Doughty said.

Josie Parker, director of Ann Arbor District Library, said she is grateful that “Snyder’s proposed budget includes some money for libraries,” which shows that he understands their importance for Michigan residents.

“However,” Parker said, “the statewide resources cannot function with this level of funding. State aid for Michigan libraries has been cut for years, even when the budget was healthy.

“The money being provided for maintaining state resources is not sufficient,” she said.

© 2011, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

 

Filed under: Budget

More money not enough to report student information

By RACHEL IOVAN
Capital News Service

LANSING–A data collection mandate for public schools would get some financial support from legislation awaiting the governor’s approval, but some superintendents worry it won’t be enough.

A provision to reassign $25.6 million to cover the cost of collecting and reporting data to the state and federal governments is part of larger supplemental school aid for 2010-11.

The data includes information such as students’ home phone numbers and ethnicity, and square footage of classrooms.

The money results from a 2008 Michigan Supreme Court ruling that the state unconstitutionally mandated the program without funding to carry it out.

More than 450 school districts filed the suit to either eliminate the mandate or provide funding.

Superintendent Rick Seebeck of Gladwin Community Schools said the state required all districts to provide data for programs such as the Center for Education, Performance and Information, but pay the expenses themselves. That means school districts had to cover the cost of collecting data and reporting it.

But Seebeck said even if the program is funded, it’s still a waste of resources because such data as birth order and whether a student is a twin is unnecessary.

“The whole thing is useless. We don’t need any of that data,” said Seebeck.

He said schools have hired temporary replacements for secretaries who work on the data for two to three weeks, several times per year, which costs his district $6,000 to $7,000 annually.

“It’s the biggest pain in the neck since the last pain in the neck the state came up with,” said Seebeck.

Doug Pratt, the communications director for the Michigan Education Association (MEA), said data collection increased last year when the state made changes that demand more information to track student progress.

“It’s more bureaucracy and more paperwork,” Pratt said, “We need to balance the need for data to track student progress with the need to focus on working with students.”

Pratt said even if the money becomes available, it would merely reallocate existing funds.

“The legislation would pull money out of one pocket and put it in another,” said Pratt.

He also said $25.6 million isn’t enough.

“That amount in one-time money doesn’t deal with the cost of ongoing data collection,” said Pratt, “If you get $25 million divided among 525 school districts, that’s less than $50,000 for each.”

Superintendent Peter Haines of Greenville Public Schools said he suspects the reporting requirements hurt every district in the state.

“The most significant negative impact of these additional responsibilities is the increasing redistribution of precious financial resources away from the classroom,” said Haines.

Haines said he hopes the Department of Education will issue more standardized requirements to prevent information overlaps.

Gladwin’s Seebeck acknowledged that some of the mandated data could be useful but called the demands excessive.

“I’m sure the state has the best intentions, but they’ve gone too far to the point where it’s ineffective,” said Seebeck, “If there were tangible results that helped guide instruction, then I could see the value of the database, but we don’t use any of that data for educational purposes.”

Seebeck said he and several other superintendents considered not complying, but received a letter from the department warning that they’d lose state funding if they didn’t turn in the information.

He said, “I’m all for educational accountability, but when you’re too busy filling out forms to monitor students, there’s clearly a problem.”

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

 

 

Filed under: Budget

Brownfield cleanups across state seek federal aid

By JULIE MIANECKI

Capital News Service

LANSING – At a time when state money is elusive or nonexistent, Michigan communities, including ones in Allegan and Lenawee counties, are turning to the federal government to finance the redevelopment of contaminated brownfield sites.

Cleanup grants from the Environmental Protection Agency (EPA) have benefitted brownfield redevelopment programs in those two counties, and both Ottawa and Montcalm counties also have applied for funds.

Brownfields are abandoned or underused properties that were formerly the sites of industrial or commercial facilities. They often pose environmental or health risks to their neighborhoods.

Allegan County received two $200,000 federal grants this year after being turned down the first several times it applied.

“It’s a little bit different here than in some areas of the state,” said Kevin Ricco, director of county development. “We’re not as industrialized as some areas around metro Detroit, but manufacturing certainly still has a presence here. We’ve got a lot of smaller businesses that were mom-and-pop gas stations and that sort of thing that need to be evaluated, cleaned up and made useful again.”

Ricco said the grants will go toward environmental assessment of two types of sites: those with hazardous materials and those with petroleum.

Lenawee County also received two $200,000 assessment grants from the EPA, according to Tim Robinson, chief operating officer of the Lenawee Economic Development Corp.

“So far we’ve used half of the hazardous materials grant,” Robinson said. “We’ve used about 10 to 15 percent of the petroleum grant.”

Robinson added that Lenawee has a wide variety of brownfield sites. Some currently undergoing work include the location of a former grocery story and butcher shop in Morenci, which will be taken over by a Subway restaurant, and the former location of a cannery in Blissfield, which will be turned into a technology park.

Past applications from Ottawa and Montcalm counties were unsuccessful, but both counties reapplied for EPA grants in October.

Jim Sygo, deputy director of environmental protection at the Department of Natural Resources and Environment (DNRE), said the state has basically run out of money for brownfield programs.

“There was a time when we had in excess of $90 million, divided between grants and loans, to assist developers,” Sygo said. “We’re probably down to our last $5 or $6 million.”

“Our counties continue to be really successful in getting federal tax money, the most plentiful source of funding at the moment,” said Flo McCormack, grant services coordinator at the Michigan Association of Counties. “It’s great, because it’s bringing the people’s tax dollars back into their community to help provide incentives to get brownfields redeveloped.”

McCormack said Michigan is a national leader in securing federal grants for brownfield redevelopment, but the state itself has cut down on funding programs because of economic hardship.

“In the past, the state sold environmental bonds to help fund the program, but it’s not able to do that successfully anymore,” McCormack said.

Despite federal money, the same major problems that face all Michigan businesses with the difficult situation in real estate are affecting brownfield development, she said.

“The market has just about evaporated,” McCormack said. “So the competition for getting a new business into a community to redevelop a brownfield site is harder than ever.”

She added that it’s essential to work on cleaning up such sites so they’ll be ready for businesses to take over.

“We can also provide financial incentives that may make these sites attractive and financially feasible to developers,” McCormack said.

DNRE’s Sygo said, however, that even if businesses want to build on brownfields, banks aren’t as willing to make loans as in the past, so businesses often can’t get enough money to get started.

“A lot of the problem is attributable to the credit risk we have right now as a result of the downturn in housing and the general downturn in development,” Sygo said. “People just don’t have enough confidence. It isn’t that it can’t be done – there just isn’t enough confidence that it’s going to be done.”

“There are thousands and thousands of projects out there,” said Brad Hansen, the environmental program coordinator for Oakland County Waste Resource Management. “We’re not even scratching the surface at this point.”

The Michigan Manufacturers Association predicts a strong future for brownfield redevelopment, although manufacturers have less money to redevelop and build on brownfield sites, said Randy Gross, director of environmental and regulatory policy.

“Everybody is focusing on urban centers to encourage growth in the state, and to encourage growth and reinvestment in the centers you need brownfields,” Gross said. “I think you’re going to see a lot more brownfield redevelopment over the next 10 years.”

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

Filed under: Budget

Police layoffs loom amid budget cuts

By YANG ZHANG
Capital News Service

LANSING – More local police officers and sheriff deputies are losing jobs due to budget cuts, which puts public safety in jeopardy, law enforcement experts say.

The Oakland County Sheriff’s office has lost $12 million of its budget in the past two years and will lose another $1.3 million in 2010-11, Undersheriff Michael McCabe said. That means the department will lay off more deputies.

The Macomb County Sheriff’s Department has had an $8 million cut since 2007.
Although there is no plan to cut staff, Sheriff Mark Hackel said, the department will not fill vacancies.

Local police chiefs and sheriffs blame the budget cuts on declining tax revenues during the recession.

Hackel said the economic downturn has hampered people’s ability to pay taxes, so the counties, cities and townships get less revenue for public services.

Tom Hendrickson, executive director of the Okemos-based Michigan Association of Chiefs of Police, said Southeast Michigan suffers the most in the state from the bad economy.

The automobile industry in the area is much less vibrant, Hendrickson said. As a result, housing value drops and local property tax revenue decreases.

“Police operating budgets will continue to decrease in the next few years,” he predicted.
Many municipal agencies are eliminating officer positions.

Oakland’s McCabe said his organization lost more than 125 out of about 1,200 positions in the past two and half years and will cut more next year.

“Many local departments are planning to do the same thing,” McCabe said.

For example, the Waterford Police Department recently laid off 10 patrol officers, 12 detention workers and one crime scene investigator and will have more layoffs, Chief Daniel McCaw said.

Pontiac may undergo a worse scenario. The city will lay off 29 police officers in November, which will bring the number of police employees down to 62 from 175 in 2004, McCabe said.

A criminal justice professor at Wayne State University, Eric Lambert, said he worries that fewer police officers may lead to more crimes.

Lambert said police help prevent crimes, so laying off officers may mean losing that preventive ability.

Under the “broken-window” theory, he said, if police don’t respond to small crimes, violators may commit more serious crimes.

For example, police officers used to investigate burglary cases at the scene, but now victims may be asked to come to the department headquarters because of the insufficient staff, he said.

That approach is not likely to solve the crime but could escalate criminal activity, Lambert said.

He said fewer police officers would also slow the response time for nonviolent crimes, the most typical kind in Wayne County.

McCabe said, “You have fewer police officers out on the street. They are not able to get to the calls as quickly as they used to be.

“That places the local residents in jeopardy,” he said.

Terrence Jungel, executive director of the Michigan Sheriffs’ Association, said layoffs also could reduce police officers assigned to schools, which will compromise student safety.

Students will miss the chance for safety education and the police will lose a valuable link with the young generation, Jungel said.

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

Filed under: Budget

No app for iTunes tax in Michigan — so far

By JOSH GARVEY
Capital News Service

LANSING – iTax iTunes? Does Michigan have an app. for that?

Not yet.

Michigan doesn’t collect sales tax on such transactions, but Indiana and Wisconsin do, and Illinois’ governor considered it as a way to meet a budget shortfall before backing away from the idea.

iTunes and similar online services let people download music or videos from the Internet for about $1 a song or a few dollars for a video, which is usually charged to a credit card.

“I think one of the issues here is that there doesn’t seem to be any will to do anything that involves money in terms of a new tax,” said David Zin, an economist with the Senate Fiscal Agency.

The nonpartisan agency analyzes tax and budget issues for the Senate.

Judy Putnam, the communications director for the Michigan League for Human Services, said that although there probably isn’t the necessary political support for new taxes, that attitude may change “as people come to realize how deep these cuts are going to be,” in the state budge.

Zin said that the idea of a tax on iTunes and other-services has come up a couple of times.

“One of the issues we would have with a downloadable content tax is enforcement,” Zin said. “If I download a file from the Symantec website, and Symantec is out of California, the server is in Germany and I’m in Michigan, how do we find out that I owe sales tax on it and do I?

Perhaps I owe use tax on it because I brought an untaxed item into the state and used it,” he said.

Confusion over how such a tax would work also extends to legislators.

“The whole ‘Internet and sales tax’ problem is difficult,” said Rep. Tim Melton, D-Pontiac. “I don’t really have a comment about it.”

Melton is vice chair of the House Tax Policy Committee.

Michael LaFaive, the director of fiscal policy for the Makinac Center for Public Policy in Midland. said that his free market- oriented think tank opposes to any tax on downloads.

“Just because something exists doesn’t necessarily mean that a tax should be slapped on it,” he said. “The state takes enough from us and does enough to us already.”

Putnam of the League for Human Services said that her group hasn’t looked specifically at any sort of iTunes tax.

But the league wants to update Michigan’s sales tax to apply to services as well as products. She said an iTunes tax seems to be in line with that stance.

“In general, we advocate for a more modern tax structure,” she said. “Economists will tell you that the way to a solid, stable base is to tax the growing parts of a society.

“Downloads would seem to qualify as growing,” she said.

Part of the reason sales tax laws differ so much from state to state is a U.S. Supreme Court decision that requires only businesses with a physical presence in a state to collect sales tax on products sold there.

That dictates Wisconsin’s law, which requires retailers with a store in the state to collect sales tax. Since Apple has a store in Wisconsin, that means iTunes sales are taxed directly to state residents.

A state can only collect use tax on sales by businesses without a of physical presence in the state.

In Indiana, the tax on downloaded content is part of the state’s use tax. Use tax is supposed to be reported on a person’s income tax return.

Stephanie McFarland, the director of public relations for the Indiana Department of Revenue, acknowledged that enforcement can be difficult. Of the 3.1 million people who filed tax returns in Indiana in 2008, only 26,000 reported a use tax and the state collected $1.6 million from them.

Michigan’s use tax covers products but not downloaded content.

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

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Budget cuts could hamper civil rights, advocates say

By JOSH GARVEY
Capital News Service

LANSING – As Michigan’s budget woes continue, the Department of Civil Rights might face another round of cuts to an already shrunken agency, a move that could hurt civil rights in the state, according to the head of the Michigan Migrant Legal Assistance Project in Grand Rapids.

And Daniel Krichbaum, the interim director of the department said “We’re going to try and maintain our service levels. We only have a budget of about $13 million, and we’re going to try and save it.”

Rep. Fred Durhal, D-Detroit, said that cuts to all government agencies are hard to avoid.

“There were 3 percent cuts made in virtually every department in the general government budget which I chair,” Durhal said. “The budget which passed the House reflected that.”

The department handles complaints about discrimination, acts as a mediator among ethnic and cultural groups, and offers workshops about cultural sensitivity.

“Civil Rights is one of the departments that can least afford those cuts,” Durhal said.

Harold Core, the director of public affairs for the department, said that as it has lost funding, it’s had to set priorities on what services to keep.

“Because we are so small, you reach a point where some individuals in the department are the only ones who perform a certain function, and when you lose that person, you lose that function,” he said.

“Last year we lost around 22 percent of our staff,” he said.

Core said the agency lost 25 positions in the cut and that it currently has 98 employees.

Migrant Legal Assistance Project executive director Teresa Hendricks said that the department is the “only government agency that has done an investigation that shows where the real problems lie in the farm industry in Michigan.”

Her organization provides legal support for migrants in the state.

Hendricks referred to a recent Civil Rights Commission report that showed many problems with how migrant workers are treated in the state. The commission held farmworker forums in Oceana, Lenawee, Manistee, Berrien and Arenac counties.

“If anything, its work should be justified, and it should be given more money, not less because it is the group that outlined these problems in the state,” she said.

Hendricks said that the department performs an important function, acting as a mediator among the farming community, migrant workers and the government.

She said that without the department, it would “push our organization further and further into obscurity, along with the plight of the migrant workers and their employers.”

Core said part of the department’s trimming-down effort revolves around streamlining paperwork and processes involved with complaints.

Core also said more cuts could increase the time it takes to answer discrimination complaints.

“For a lot of people, when they come here, they can’t afford a private attorney,” he said. “It puts them in a situation where they can’t get access to any remedy for their situation.”

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

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Grants spotlight lighthouse projects

Whitefish Point Lighthouse
Whitefish Point Lighthouse – National Oceanic and Atmospheric Administration

By MEGAN DURISIN
Capital News Service

LANSING – Several Michigan lighthouse are seeking grants to keep their lights shining, as well as their roofs, windows and paint in ship-shape condition.

While most lighthouses are in good shape, the people looking after them face a greater challenge than ever before, said Terry Pepper, executive director of the Great Lakes Lighthouse Keepers Association in Mackinaw City.

“When they first took ownership, there was a great surge from the public to get them restored,” Pepper said. “But they still need constant maintenance, and it’s more difficult to come up with money in these difficult economic times.”

The state Historic Preservation Office received 10 grants applications this year, including ones for the Cheboygan River Front Range, Grand Traverse and Whitefish Point lighthouses.

The money comes from the Michigan Lighthouse Assistance Program, funded through the sale of “Save Our Lights” specialty license plates, which raised $152,065 in 2009.

Denise Sachau, grants manager at the preservation office, said the program receives about $160,000 a year from the plate sales, a figure which has stayed steady in recent years.

“The license plate fund has stayed pretty consistent even with the economy,” said office architect Bryan Lijewski, with the program funding five to 10 projects each year.

The office has given between $79,000 and $200,000 annually since 2000 and has been able to assist all applicants, he said.

Pepper’s association owns the Cheboygan River Front Range Lighthouse and St. Helena Lighthouse, about 10 miles west of Mackinac Island. It wants the money to excavate the stone and brick foundation at the Cheboygan lighthouse and replace the drain, which leaks water into the basement during heavy rains, he said.

The association also received money in 2009. As a result, “the lantern no longer leaks and the deck around it no longer leaks,” Pepper said. “It looks the way it did in 1910.”

Michigan has 128 lighthouses – the most of any state – and most located on the shore are in good to excellent condition, Pepper said.

“In the water, it’s a different kettle of fish,” Pepper said. “Some are in deteriorated condition because the Coast Guard’s not maintaining them.”

The Coast Guard originally owned all Michigan lighthouses, but it transferred more than 70 to the state in 1999, which Sally Frye, secretary-treasurer at the Michigan Lighthouse Alliance in Traverse City, said was due to advances in GPS technology.

Since then, the agency has given others to government groups and nonprofit organizations.

The Coast Guard has maintained the lenses on active lighthouses, but the rest of their structures have needed significant attention, Frye said.

“It’s extremely expensive,” Frye said. “Many have not been used, so there’s maintaining the foundation, re-roofing, windows. It takes a great deal of money.”

Frye said the Coast Guard will transfer four or five more lighthouses to groups at the 2010 Great Lakes Lighthouse Preservation Conference in June, including two on Lake Huron and one on Lake Michigan.

Overall, lighthouse tourism is a big asset to the state, Frye said.

“They are the jewels of Michigan,” Frye said. “They are a wonderful draw in these economic times and can help the state if we work with tourism and the government.”

The Whitefish Point Lighthouse in Paradise attracts about 65,000 visitors each year, said Sean Ley, development officer for the Great Lakes Shipwreck Museum in Sault Ste. Marie.

Whitefish Point, the oldest operating lighthouse on Lake Superior, has applied for a grant this year, which Ley said would be used to restore the iron-pile skeletal tower.

Ley said it’s become more difficult for lighthouse keepers to obtain the matching funds necessary for grants in recent years, but his museum has been successful getting funds from the Michigan Lighthouse Assistance Program.

“We have a strong earned income from what we do,” Ley said, including bringing school groups to the museum and historic buildings at the site. “We manage the facility well.”

Frye said that most people who work as lighthouse keepers volunteer in the museums and gift shops and lead tours.

“Lots of groups are finding it successful by turning it into keeper programs,” Frye said. “People pay to stay a week or two and help with anything they’re interested in.”

Frye describes herself as “a lighthouse nut” and said she’s worked as a keeper at the Grand Traverse Lighthouse, among others.

Pepper said one of the biggest concerns for lighthouse groups around the country is how to attract younger people to their sites and on lighthouse cruises.

“It you look around at the gift shops, most of the people tend to be older,” Pepper said. “The gray-haired group tends to gravitate towards lighthouses.”

His association has a successful record involving young people, with groups of Boy Scouts from Ann Arbor doing “incredible things” at the St. Helena Lighthouse, Pepper said.

“We’ve had close to 1,000 Boy Scouts stay in the last 20 years,” Pepper said, with 27 earning their Eagle Scout awards by installing windows, preserving the ceiling and building an exact replica of its 1895 boathouse.

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

Filed under: Budget

Grants smaller but arts groups still thankful

By CHENQI GUO
Capital News Service

LANSING – Although aid from the Michigan Council for Arts and Cultural Affairs was only $1.5 million this year, down dramatically from $7.9 million last year, recipients say they’re happy to get anything.

“I planned our budget on getting zero from the grants this year, so to me it was $7,500 that we didn’t expect,” said Liz Ahrens, executive director of Crooked Tree Arts Council in Petoskey. “We’ve a million dollar operating budget, and the grant definitely helps us in art exhibitions, concerts and programs for students,”

The council received almost twice as much in 2009.

“It’s a nice surprise and it contributes overall to our programs that we offer to our community,” Ahrens said of the 2010 grant.

Despite the chop in state support, she said the council hasn’t raised its prices.

Cultural organizations in other parts of the northern Lower Peninsula report similar experiences.

For example, Pam Westover, executive director of the Cheboygan Area Arts Council, said, “Everybody has to tighten the belt and try to hang on. But we’re aware of the cut, we’re more prepared.”

The council also received $7,500, about half of its grant last year.

The largest grants from the state council went to the Detroit Institute of Arts, Detroit Symphony Orchestra, Edison Institute and College for Creative Studies in Wayne County and Interlochen Center for the Arts, each receiving $20,000.

Many organizations didn’t bother to apply because they had been cutting staffs and didn’t have enough staff to write the grant proposals, according to Ahrens.

The Association for Harbor Arts in Harbor Springs, one of the cultural institutions which has never received direct state grants, is working hard to keep its operation going.

“Funding is a big problem since stage production cost is skyrocketing. It’s getting harder and harder,” said Sulane Hamilton, president of the association.

The association has received some general grants from local agencies like the Petoskey-Harbor Springs Area Community Foundation. “It’s not as generous as previous years but we appreciate it, considering the economy,” Hamilton said.

Although funding is not as bountiful as in the past, the association still tries to maintain its programs, she said.

“We have one major musical production, we support young adult community theatre and the other half of our mission is scholarships supporting individuals in the arts,” Hamilton said.

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

Filed under: Budget

Highways, bridges at risk as transportation money dwindles

By DANIEL OPSOMMER
Capital News Service

LANSING – Michigan is at risk of losing nearly half a billion dollars in federal aid for transportation funding in 2011 due to declining income from fuel taxes.

Beginning in October, the state faces an $84 million shortfall in fuel tax revenue to receive federal matching funds, according to the Department of Transportation (MDOT).

But fuel tax hike proposals are stalled in the Legislature.

Without full federal aid, the state transportation budget for 2011 would be $601 million, a 58 percent decline from 2010 when it was $1.4 billion.

“If we don’t resolve our revenue shortfall, we aren’t going to have funding for road and bridge repairs, much less for snow removal and salt,” said MDOT Director Kirk Steudle.

“Drivers pay an 18.4 cent per-gallon federal tax so it would be a shame if we don’t receive our share of funding,” he said.

Projections from MDOT show the state could lose nearly $2.1 billion through 2014 because Michigan won’t be able to match all the funds it’s eligible for.

Those matches provide $8 from Washington for every $2 the state raises.

Reps. Richard Ball, R-Bennington Township, and Pam Byrnes, D-Lyndon Township, are the sponsors of tax hike legislation to close the gap.

Their proposal would initially increase the gas tax from 19 cents to 23 cents a gallon, and the diesel tax would rise from 15 to 21 cents. Then on Jan. 1, 2013, both taxes would rise to 27 cents a gallon.

Ball blamed Michigan’s shrinking population, tightening family budgets and the emergence of more fuel-efficient vehicles for the drop in revenue.

“The people who don’t want taxes of any kind at anytime won’t like this but they need to face reality,” Ball said. “The roads and bridges are deteriorating every year from traffic and the freeze-and-thaw cycles, and the state needs funding to repair them.”

Rep. Wayne Schmidt, R-Traverse City, who sits on the House Transportation Committee, said he opposes a tax increase.

“Transportation funding is a serious issue for our state, but I believe we need to look at alternatives to increasing the fuel tax,” Schmidt said. “We just can’t place anymore burden on the citizens of Michigan.”

Schmidt said he supports a plan by the House Republican Caucus to allocate money to transportation from other areas of the budget to ensure that Michigan receives federal aid without higher taxes.

Meanwhile, Sen. Judson Gilbert, R-Algonac, is sponsoring legislation that would eliminate the gap between gas and diesel fuel taxes by increasing the diesel tax from 15 to 19 cents.

The diesel tax hasn’t risen since 1984, while the gas tax rose in 1997.

According to MDOT, more than 90 percent of the 10,000 miles of state highways and bridges are in good condition today.

Steudle said less than half will be in good condition by 2020 even if the state receives the maximum possible federal funding, and only a quarter of the mileage will be in good condition if the state doesn’t receive federal match dollars.

In addition, he said more than 90 percent of the bridges will be maintained if the state receives all possible federal aid, but only 84 percent will be in good condition by 2020 without the money from Washington.

“Highways would deteriorate immensely if we lose our federal funding because we have to place a greater emphasis on bridge repair, which is also more expensive,” Steudle said.

Under the House legislation, all the extra tax revenue would go into a new transportation investment fund that could be used only for road and bridge repairs.

Ball said, “I want to ensure that the departments receiving this money put it entirely toward road and bridge repair and start tightening their budgets.”

The House proposal would also create a commission to study and recommend long-term alternatives for the current fuel tax system.

And that’s an issue gaining attention in the push for electric and hybrid vehicles.

Sarah Hubbard, senior vice president of government relations for the Detroit Regional Chamber, said the current decline in gas tax revenue will accelerate as the number of electric and hybrid cars increases.

Mike Nystrom, vice president of government and public relations at the Michigan Infrastructure and Transportation Association, said, “Altering and raising vehicle registration fees is one option being discussed because those vehicles still have four tires on the road, and they’re a user of our transit system.”

MDOT’s Steudle said implementing tolls isn’t a practical solution because the revenue wouldn’t be enough to cover current shortfalls and because Michigan’s highways were built with federal subsidies under an agreement they would remain free. Under that agreement, the state would have to repay the federal government for highways converted to toll roads.

Steudle noted that most states collect tolls to tax people traveling through their state.

“A lot of the driving we do in Michigan is just us because we’re a peninsula,” Steudle said. “In Ohio and Indiana, 70 percent of the traffic on interstates is driving straight through.”

Ball and Byrnes’ legislation is pending in the House Transportation Committee, while Gilbert’s bill is pending in the Senate Transportation Committee.

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

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New state bonds proposed to boost energy efficiency

By CHENQI GUO
Capital News Service

LANSING — Some lawmakers want the state to be able to issue bonds to help homeowners pay for energy efficiency measures such as renewable energy systems, storm windows, automated energy controls and new heating and air conditioning units.

Rep. Mark Meadows, D-East Lansing, said, “We are working on a bill which would provide homeowners in Michigan for ‘clean energy’ bonds. It would change the way that heating system operates.”

Low-interest loans would help homeowners improve energy efficiency and reduce use. They would also receive instructions about more energy-efficient appliances.

“The state doesn’t need to build so many facilities if the state energy needs are reduced. Hopefully it’ll help the economy,” Meadows said.

Clean energy promotes the state economy in several ways, with creating jobs as the most direct one, said Hugh McDiarmid, communications director of the Michigan Environmental Council.

“It creates new employment opportunities in the manufacturing industry and stimulates the economy by not polluting the environment,” he said.

“We built the state’s first wind farm. Wind is used as an important power source in the Great Lakes area,” he said.

Cities, counties and villages would have the option to participate in the proposed bond program.

“The interest is in the power of local units of government so it may vary from county to county,” said Rep. Robert Jones, D-Kalamazoo.

However, not everyone sees the need for such bonds.

Samantha Harkins, legislative associate for Michigan Municipal League, said Ann Arbor is pushing the bill.

“I don’t want to say it’s a controversial one, but it’s offering options that other counties don’t need to have,” Harkins said.

The league represents cities and villages.

She said Ann Arbor is on the cutting edge of energy efficiency, and the bill would be helpful for the city’s energy office.

The lead sponsor is Rep. Rebekah Warren, D-Ann Arbor. Co-sponsors include Reps. Dan Scripps, D-Leland; Sarah Roberts D-St. Clair Shores and Lesia Liss, D-Warren.

The Great Lakes and Environment Committee has passed the bill which is pending in the full House.

© 2010, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

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Filed under: Budget

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