Proposal 1â??What does it mean?
Fri, 03 Apr 2015 23:05:11 GMT —
We're just one month away from a big vote here in Michigan.
On May 5th, voters will decide if a sales tax hike should help fund road repairs across The Great Lakes State.
Itâ??s called Proposal 1and has a lot of people wondering exactly what it does. NBC25 breaks it down.
When voters hit the polls May 5th, theyâ??ll see Proposal 15-1. The main question centers around whether Michiganders should amend the state constitution to increase the sales tax to 7-percent?
But before we get to that question, how did we get here in the first place?
â??Frankly, lawmakers should have done this probably years ago but they just never got around to it,â?? says Paul Rozycki, retired political science at Mott Community College.
Lawmakers never got around to it because nobody wants to be that guy who raises taxes.
â??We're already middle of the pack with taxes on gas,â?? says Eric Lupher of The Citizens Research Council. â??If we escalate it higher, we'll be among the highest and there being some conservative interest in the state, they didn't want that."
â??They just dropped it in the lap of voters,â?? says Rozycki.
So voters are left to make the decision.
"Number one, it's going to change the way we collect taxes and fund the roads,â?? says Rozycki.
Which means raising the sales tax from 6-percent to 7-percent.
â??One of the first things you're going to see is when you buy goods at the store, it's going to have an extra percent tax on them,â?? says James Hohman of the Midland-based Mackinac Center.
Proposal 1 would also eliminate the sales tax on gasoline but change the 19-cents flat gas tax rate to a percentage, which means drivers would pay a minimum of 23 cents more a gallon at the pump.
â??The third basic thing it's going to do--because the sales tax hurts low income people, it's going to give people the earned-income tax credit back again,â?? says Lupher.
â??There are some people who are going to come out ahead in this proposal. This does increase the state's earned income tax credit which is for low income people, especially those with children,â?? says Hohman. â??That increases from 6-percent of the federal credit to 20-percent.â??
â??When you break it down it's pretty simple. We're going to increase the amount of taxation on fuel but take the sales tax out of the taxation of fuel and we don't want our schools or local governments to be hurt by that so we have to deal with that through the constitutional amendment,â?? says Lupher.
Depending on who you ask--voting yes on Proposal 1 is either a good idea or a terrible idea.
Over the next coming weeks, NBC25 will talk one-on-one with Proposal 1â??s biggest supporters and opponents.