If our elected representatives in Lansing are in need of any suggestions to “find” money to reallocate towards more important matters affecting Michigan, a local vote that was taken yesterday afternoon by an advisory committee would be my recommendation for a great place to start.
Sales Tax Retention on Off-Road Fuel Will Trigger Pandemonium in Michigan's Fuel Distribution Network
Let’s walk through the numbers and consequences of the most disastrous aspect of Proposal 2015-01: the retention of the sales tax on fuels used almost everywhere but on the roads. Most disastrous because this will be enshrined in our Constitution if Proposal 2015-01 passes. No act of our Legislature or sleight of hand by our Governor can correct the Michigan Constitution if Proposal 2015-01 passes. They can only decide to impose astronomical costs on the petroleum distribution network, create a lot of new criminals, spawn a black market in fuels, forego sales tax revenues, or some combination thereof. The Michigan Constitution gets its first intractable dilemma.
HCJR UU contains the actual language amending the Michigan Constitution. Sales and use tax rates go from 6% to 7%, and the sales tax is no longer permitted on “gasoline or diesel fuel used to operate a motor vehicle on the public roads or highways of this state”. So the plain language of HCJR UU authorizes continued sales tax collection on all gasoline and diesel oil which is not used to operate a motor vehicle on the public roads or highways of this state, at the new 7% rate.
This 7% ‘ORV’ fuel sales tax will be over and above the motor vehicle fuel tax, which continues to be applied to recreational off-road vehicle and marine fuels as a ‘privilege tax’ under PA 451 of 1994. To make things even more confusing for fuel suppliers and consumers, there will be a third category of fuel subject to the sales tax, but not the motor vehicle or privilege tax: fuel used industrially, for construction, for farming, for lawn care, generators, and other miscellaneous purposes.
Less noticed, the 7% sales tax is also authorized on fuels other than gasoline and diesel oil used to operate vehicles on the public roads or highways of this state. This is quite a surprise since PA 468 of 2014, the motor vehicles fuels tax law of the road tax package, goes to great lengths to bring alternate transportation fuels such as liquid or compressed natural gas and lighter alternative petroleum products (LPG, propane, etc.) into the general road fuels tax regimen. This is significant; the U.S. Energy Information Agency estimates that these alternate transportation fuels currently account for about 6% of ground vehicle propulsion on the public roads in 2009 and their usage is increasing sharply. The sales tax liability on these ‘green fuels’ will put them at a serious economic disadvantage to gasoline and diesel fuel. But this did not deter the Sierra Club and their fellow environmental wackos from endorsing Proposal 2015-01. David Holtz and the Michigan Sierra Club board would appear to have a ‘Common Core’ reading comprehension level.
Taking away the options, our elected class leaves us with no choice, right?
So, do you say “Baaaa” or “Moooo” on Wednesday May 6th?
That is, if you intend on voting for proposal 15-1. And all the animal sounds notwithstanding, will anyone reading this accept the fact that they have pretty much been ‘herded’ like common farm critters if they decide to support the measure?
Consider how ‘heeling’ with a border collie is done. By taking away the options for movement, a nip at the herded animal’s feet, and the dog manipulates the path of the animal so that it pursues the desired direction. When one goes astray, the new direction is blocked ensuring a return to the planned route.
When looking at proposal 15-1, it should not have gone unnoticed that the scheduling of the proposal’s vote is at the time when the roads are at their peak ‘crap’ condition. The end of winter and at a time when patching work by the local road commission has not completely caught up with the seasonal destruction.
Here’s hoping every township, and county clerk is ready with a bill for services on May 6, 2015. In fact, maybe it might not be a bad idea to remind your local election officials to ready the receipt pile and get a stamped envelope ready to submit the invoice for officiating one of the most senseless proposals yet.
Proposal 15-1 is going to cost us money no matter what. Legislators added about $9 million or more dollars to the cost of doing state business when they punted to the citizens of Michigan in that December lame duck. A recent special election in Grand Traverse County cost over $85,000 and we have about 90,000 for population. At a cost of about $1 per Michiganian, each county, city, and township government is having to officiate what is accurately called a ‘special election.’
Will Proposal 15-1 become a bridge too far for the GoverNerd?
According to a colleague of mine, the power of government (at any level), over its law-abiding citizens, is directly derived from the taxation authority. Think about that for a moment or two. In a truly free society, the government has no means to control the behavior of its citizens who aren’t actual criminals, nor will those citizens tolerate any such action from their duly-elected public servants. And while the citizenry does indeed pay taxes – because even in a free society, the government still has the authority to tax – control of the taxation mechanism isn’t left to the arbitrary whims of government functionaries, and the true tax burden is plainly visible for all to see.
By that measure, it’s been at least five decades since Michigan was a truly free state. Since being gifted with an income-based taxation model, and a full-time legislative model, the state that was once the engine of freedom has progressively mutated into a socialist laboratory, at best a generation between now and whatever bankruptcy chapter awaits a nominally sovereign state collapsing into receivership. And in that regard, I don’t think it overly dramatic to suggest that this statewide special election to decide the fate of a legislative piece of sausage is similar to Gettysburg . . . if we don’t stop them here, then where will we ever be able to stop them at all?
The upside is that We the People received a bit of good news on this front yesterday, though how this’ll ultimately play out is still an open question.
It’s been a relatively quite week at the gas pump, based on the national average holding at $2.426/gal versus last Monday, but while some motorists are enjoying mild declines, the Great Lakes has taken over what the West Coast saw weeks ago.
Prices are soaring throughout the Great Lakes with big spikes most prevalent in Illinois, where prices have increased an average 29c/gal versus last week. Michigan trails, having risen 25c/gal in a week, while Indiana, Wisconsin, and Ohio have risen 15c, 13c and 12c, respectively. Meanwhile, Kentucky saw an increase of 10c/gal.
The contentious May issue is complicated, but understandable. It just takes time.
There is a ton of information to be shared on the road funding issue.
RightMi.com has pointed out many of the flaws, and the bad policy associated with the late night lame-duck session passed monstrosity voters will be asked to approve May 5th. We pointed out the obvious in a graphic (to the right) only 24 hours ago, and as of this writing, the graphic has been viewed over 2200 times on Facebook alone. (still climbing fast) We invite those who are here looking for information on this constitutional disaster to sift through a few pages on our site for all you need to know about the single biggest tax increase many of Michiganians will face in their lives.
And the argument is fierce. On one side we have the shills for the road industry pimping the YES vote, and the other side we have families who don’t much feel like picking out the switch so ‘daddy’ government can beat them down with an additional $500 a year in taxes.
Then there are the studies. Like the one published by the Mackinac Center’s James Hohman: