ABC12 breaks down Proposal 1

LANSING (WJRT) - (04/30/15) - Proposal One is probably one of the biggest, and most important votes we've seen in Michigan in some time.

You - the voter - will decide whether or not to raise the state's sales tax from 6 to 7 percent, all to help fix Michigan roads.

However, there are many more strings attached than just money to fix roads.

We're taking a closer look at where the money is going and how much more will come out of your pocket.

Finding money to fix and maintain more than 120,000 miles of roadway is a battle that has rolled on for years.

In the early morning hours of December 19, 2014, Lansing lawmakers passed legislation that would increase taxes to fix the state's crumbling roads - known as Proposal 1.

It'll be up to Michigan voters whether or not they want Proposal 1.

As it reads, the proposal would amend the state constitution, increasing the sales tax from 6 percent to 7 percent.

Proposal 1 is estimated to bring more than $1.3 billion a year for transportation. However, it's not raising the sales tax that would fund roads, but rather a series of bills tied to Proposal 1 that will bring in road money.

Proposal 1 also calls for eliminating gas and diesel fuel taxes for motor vehicles, in favor of a wholesale tax - one that could potentially cost you more at the pump. Michigan drivers would also pay more in some cases for vehicle and truck registration.

Proposal 1 could inject millions of dollars in to counties around Mid-Michigan for road funding.

If passed, by 2016, Midland County is projected to receive just over $1.2 million. Bay County's road budget is estimated to get a boost of $1.7 million. Saginaw could see close to $3 million in additional money. Prop 1 is projected to pump nearly $4 million into Genesee County.

With 1,400 miles of road and 123 bridges, Genesee County Road Commissioner John Daly says a major boost in funding is needed for upkeep. Daly say the dollars would be used for preventative maintenance and that Proposal 1 would provide warranties for road work.

"It can include everything from ditching, shoulder work, even pothole patching," he said.

Supporters of Prop 1 say in addition to guaranteeing a stable way to fund roads, the proposal dumps more money from the tax increase into local governments and K-12 education.

Critics say, "Has an extra 700 million dollars tacked on to it. Over and beyond the money they say they want to fix the roads," said Bob Schneider, with the Citizens Research Council of Michigan

The Citizens Research Council of Michigan says it provides unbiased information regarding issues facing Michigan. We asked him what the guarantees are in Proposal 1 - if passed.

"The constitution now guarantees that 90 percent of it will go toward roads and bridges. The other 10 percent will go to public transportation," he said.

What's the cost to you - the tax payer - if Proposal 1 is approved? It's estimated Michigan taxpayers could expect to pay between $477 and $525 more in state taxes as a result.

Patrick Anderson, of the Anderson Economic Group out of East Lansing, helped to write some of the language you'll see on the ballot next month.

"We did very, very sophisticated analysis, taken into account income, household size, how much you drive," he said. "When you get to individual households, it varies tremendously."

Anderson says a lot of how much more Proposal 1 will cost tax payers varies - depending on spending habits and income. His firm analyzed the cost of Proposal 1, as written for different scenarios.

According to his calculations:

A couple without kids, two cars and an income of about $65,000 would pay $642 more in taxes.

A single renter with one car and an income of $50,600 would pay an extra $293 in taxes.

A family of five with an income of $120,000, two cars and a boat would pay $913 more.

A mother with one child and vehicle, with an income of $21,000, would see a $112 tax cut.

How to pay for these things has been a long standing debate, and now the final say belongs to Michigan voters.

The proposal language you'll see Tuesday also includes increased earned income tax credit.

"Our people deserve safer roads. They deserve roads that are more efficient, that cause less damage to our cars," said Lt. Gov. Brian Calley.

How to pay for these things has been a long standing debate, and now the final say belongs to Michigan voters.

"Whatever happens, there are outcomes both good and bad," Daly said.

The proposal language you'll see Tuesday also includes an increase in the earned income tax credit.

Also, a yes vote will increase dollars for the School Aid Fund - an estimated $200 million. That money will go to include K-12, community colleges, and career - technical education. It will not go to four year colleges and universities.

To help make your decision on Tuesday, click the links in the 'related links' section of this story.

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