Michigan Votes Forum

Introduced in the Senate on February 21, 2006, to prohibit more than $8.8 million in road tax revenue from being used to reimburse the Department of Treasury for the cost of collecting the revenue. In fiscal year 2005-06 $8.2 million in road tax money was transferred to the department

The vote was 22 in favor, 15 opposed and 1 not voting

(Senate Roll Call 278 at Senate Journal 40)

Click here to view bill details.

Senator Leland's statement is as follows: I believe I understand the reason for the proposal; however, I think it is shortsighted. Treasury has to pay for its operations somehow. If we institute an end cap there will come a time when the cost for Treasury to do the job of collecting motor fuel tax revenue will be higher than the cap. The taxes have to get collected and the Constitution says that we should use transportation revenue, but with this law in place, we'll be forced to spend general funds, taking away from other areas and Treasury operations or from other General Fund programs in other departments. The proper way to deal with this is in the annual budget process. The method that Treasury currently uses to calculate their costs is the simplest method available to account for in a complex process. The auditors who collect motor fuel revenue also work on many other taxes, so it is difficult to account for their work hour-by-hour or day-by-day. Contrary to what you may have heard, the auditor general has said that the accounting method being used by Treasury is perfectly proper. So I urge my colleagues to vote "no" on Senate Bill No.1051. If you feel that a cap is needed, then join the debate on the Transportation budget. That would be the proper place to limit the transportation funds that Treasury receives.

Senator Basham's statement is as follows: I urge my colleagues to vote "no" on Senate Bill No.1051. There are a number of reasons. This bill proposes a cap on the amount of transportation revenue that can be used to pay the cost of the Treasury Department actually collecting the taxes. Don't get me wrong--I'm completely in support of more funding for our roads, but this proposal is not going to get us anywhere in the right direction. We only need to look at the Secretary of State to see that the caps do not work. The same section of law has a $20 million cap on transportation revenue that can go to the Secretary of State, but the cap has been outdated for years. It is so archaic that we created a whole separate fund called the Transportation Administrative Collection Fund, or as we would say, TAC Fund, to get money to the Secretary of State and get around the $20 million cap. Now, in the other chamber this week, a bill is moving to raise the cap for the Secretary of State from $20 million to $31 million. So in one chamber we're doing one thing and the next chamber is working against us and going in the other direction. Caps don't work. As we mentioned earlier, the proper way to handle this issue is through the budget process. I hope you will join me in voting "no" on this piece of legislation.