Williams: Fix the Roads, Protect Economic Development

Good afternoon,

Mr. Chairman and members of the House Transportation Committee, my name is Brad Williams with the Detroit Regional Chamber.

First, I would like to begin by expressing the Chamber’s appreciation to the House for putting forward a plan that addresses one of Michigan’s most pressing challenges – our transportation funding problem. This proposal is a significant step forward in the right direction, and we commend the House for its leadership in tackling this issue that continues to vex policymakers and frustrate all Michiganders. As you know, transportation is the lifeblood of our economy, and addressing the state’s road and infrastructure needs is essential to maintaining Michigan’s competitiveness and ensuring a high quality of life for all our residents. We also applaud efforts to ensure that all taxes paid at the pump go into the road system. The Chamber strongly believes that road users should pay for road construction and this policy continues in that vein.

At the Detroit Regional Chamber, business climate, economic development, and transportation – including public transit – are core to our mission. These issues are interconnected, and to build a thriving economy, we need policies that support all three. This plan, in its current form, brings us closer to a solution for solving our roads crisis, and there are still critical concerns that need to be addressed to ensure it does not inadvertently harm Michigan’s business environment and fairness in infrastructure funding.

One of the key concerns of the Chamber is the proposed removal of economic development incentives, including increasing the MBT [Michigan Business Tax] to eliminate contractual MEGA [Michigan Economic Growth Authority] credits in addition to allowing the SOAR [Strategic Outreach and Attraction Reserve] and site readiness programs to lapse. These incentives are vital tools that attract businesses to Michigan, foster job growth, and generate investment across the state.

Removing these incentives would send the wrong signal to companies, both here and abroad, who are considering investing in Michigan. We cannot afford to cede this ground to neighboring states and nations targeting our signature industry and its family-supporting jobs for their own constituents and stakeholders. These incentives also help diversify our economy and ensure we become the best place to do business. The Chamber urges you to reconsider the removal of these programs as part of the broader transportation funding plan.

We are also deeply concerned with the proposed corporate income tax increase – either to fund economic development programs or to fund road construction. The Chamber believes that roads should be funded by the users of the system, not small businesses. Almost 90% of CIT payers are small businesses. Raising the corporate income tax in an already competitive economic environment will make Michigan less appealing to businesses. Particularly due to the fact that it would make Michigan an outlier in the Midwest and across the country. Since 2020, 18 states have cut their corporate income tax, and none have increased it.

Finally, the Chamber has concerns with the spending formula in this package. While we recognize the importance of fixing our roads, the current formula was written in 1951, before the advent of the interstate highway system or the Mackinac Bridge, and while Detroit’s street cars were moving throughout the city. The formula treats the increasingly potholed Merriman Road that leads to Detroit Metro Airport as if it has the same needs as the two-lane Van Horn Road, just a few miles south. It distributes funds based on road miles instead of traffic volume or lane miles. This formula disproportionately impacts urban areas, which carry the bulk of Michigan’s population and traffic and are left with insufficient resources to address their road needs. We believe it’s time to rebalance the formula to ensure equitable funding across all areas of the state – especially for cities and local communities that face the highest levels of congestion and wear on their infrastructure.

Taken together, removing economic development incentives, the potential increase in the corporate income tax, and the inequities in the PA 51 formula create a scenario where businesses, residents, and urban communities are unfairly burdened. As we continue to work towards a solution for Michigan’s transportation funding, we must be mindful of the broader economic implications and the fairness of the proposals on the table.

We urge you to make the necessary adjustments to these provisions, ensuring that Michigan remains a competitive and attractive place for investment and that all communities – rural and urban alike – receive fair and equitable access to the resources needed to improve and maintain their infrastructure.

Thank you for your time and consideration. We look forward to continuing to work with you to build a stronger, more prosperous Michigan.

– Brad Williams, Vice President of Political Affairs, Detroit Regional Chamber