The convoluted and bumpy road

The Detroit Free Press has an editorial to explain Michigan's road funding deal and the sales tax increase that is going before voters in May. As I understand it, this is the entire package:

* The current fuel tax to pay for road maintenance hasn't been raised in 20 years and the problem is made more acute because we drive fewer miles in more fuel efficient vehicles.

* The most straightforward way to pay for roads would be to raise the fuel tax and raise car registration fees.

* But the Michigan legislature determined drivers would balk at the sticker shock at the pump, so they exempted fuel purchases from the general sales tax.

* Car registration fees are being raised and will no longer be reduced as the value of the car depreciates. Alas, this step also reclassifies the registration fee so that it would no longer be deductible on federal income tax forms.

* The increase in fuel tax and registration fees should – eventually – generate enough money to pay for road maintenance plus help improve public transit. The reason for the delay is first some road-related debt will be repaid.

* Exempting fuels from the sales tax means those things the fuel sales tax paid for – schools and municipalities – would lose money. That's why the sales tax needs to be raised.

* The increase in the sales tax would raise about $830 million. It would be allocated: $292 million to the School Aid Fund, $90 million to cities, $14 million for public transit, $269 million to restore the Earned Income Tax Credit (gutted by the GOP in 2010) so poor people hurt by the higher income tax get some relief, and the rest to the general fund. In the past a designation of money to the School Aid Fund meant schools did not receive the corresponding amount from the state's general budget, so there was no actual increase going to schools.

All this is dependent on voters approving the sales tax increase in May. And if it is rejected?

The legislature that began work last January is much more beholden to the Tea Party. Two things might happen:

* Refuse to raise any taxes so any road funding would be their chance to force huge reductions on gov't worker pay, public health, and general social services. This would likely not pass both legislative houses nor get the governor's signature.

* Nothing. The legislature would refuse to raise taxes or cut gov't services and so would dither over the problem for another year or two.

Put another way: There is no Plan B.