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Council Calls for Directing Sales Tax Revenue to Transit

On last day a breakthrough for cities

August 5, 2003 | By Keith Schneider
Great Lakes Bulletin News Service

Gary Shrewsbury
  Democratic Governor Jennifer Granholm turned to former Republican Governor William G. Milliken (center) and former Democratic Attorney General Frank J. Kelley to head the Michigan Land Use Leadership Council. The panel concluded its work on Monday.

LANSING – In a potentially momentous decision reached on the very last day of its deliberations, the Michigan Land Use Leadership Council on Monday recommended directing a quarter of the state’s auto-related sales tax to finance an estimated $211 million in new public transit programs in Michigan.

The proposed change in how revenue is spent from sales taxes on vehicles, parts, and gasoline would about double state funding for public transportation, a significant boost that most of the council’s members said was essential to reviving Michigan’s cities. Polly Kent, manager of the Bureau of Transportation at the state Department of Transportation, said the agency supported the proposal.

On a day that also included discussion of how racial segregation affected patterns of development, and an especially lively debate on improving the oversight of unsightly billboards, the bipartisan 26-member council concluded five months of work. The result is a 86-page report that sets out more than 100 specific recommendations to solve Michigan’s rampant and damaging patterns of development. The council’s final report, by far the most cogent and comprehensive set of planning recommendations ever produced by a state-sanctioned panel, is due to be delivered to Democratic Governor Jennifer Granholm and Republican Legislative leaders on August 15.

Necessary Recommendations
From urging new policies to prompt townships and counties to cooperate in planning and zoning, to recommending the state direct public spending on roads and sewers inward to cities instead of outward to the urban fringe, the council’s report is designed to serve as a reference guide for Michigan’s development in the 21st century. The report culminates more than a decade of debate in Michigan about the causes and consequences of sprawl on the state’s environment, economy, and quality of life.

The bipartisan panel of prominent civic, business, and political leaders was appointed in February by Gov. Granholm and the Republican House and Senate leaders. The council reached its findings about how to cure sprawl after months of negotiation, some of it arduous, but also reflecting a resoundng consensus about the damage sprawl was causing in Michigan and the need to find common ground for solutions.

Some of the council’s key recommendations – such as establishing formal statewide planning goals, and changing where state investments for roads and sewers are made – can be implemented by either the governor or the Legislature. But most of the truly substantive recommendations, such as encouraging more revenue from auto-related sales taxes to be spent on public transit, require Legislative approval.

In completing its report and urging Legislative action the council’s members said they were guided by three core goals:

  • Strengthening the state’s economic competitiveness and prosperity.
  • Conserving Michigan’s scenic beauty and natural resources.
  • Promoting new development, especially in Michigan’s cities and existing suburbs, that advance the democratic principles of equality and fairness.

“I have never been more impressed by a group of people who have come together in the finest spirit to achieve the ends we have achieved,” said former Republican Governor William G. Milliken, who co-chaired the council along with former Democratic Attorney General Frank J. Kelley.

More on the Sales Tax Plan for Transit
The proposal to redirect auto-related sales tax revenue to public transit is arguably the most significant recommendation the council made to strengthen the quality of life and the economy of Michigan’s cities. As it currently stands public transit agencies receive 6 percent, or $66.7 million, of the $1.1 billion in annual auto-related sales taxes in Michigan.

Boosting the amount to 25 percent would raise $211 million more, increasing total state spending for public transportation to an estimated $430 million annually, about double what the state currently spends.

Jim Barrett, the president of the Michigan Chamber of Commerce and a member of the council, expressed reservations about the proposal. His view was shared by Republican state Senator Patricia Birkholz, also a council member, who said that “a history of mismanagement” of transit programs in southeast Michigan prompted her to be concerned about spending more money there.

But the majority of the council’s other members enthusiastically supported the proposed increase in transit funding, and the novel idea for securing new revenue. “Transit’s role is vital to urban revitalization,” said Mr. Milliken. “We need to fund it properly.”

“The lack of viable transit is the number one impediment to Michigan’s economic competitiveness,” added Colin Hubbell, a Detroit developer and council member.

“We need to step up to the plate and say what needs to be. We need to put forward clear, precise, and bold language,” said Democratic state Representative Chris Kolb of Ann Arbor and a council member.

Heaster Wheeler, the executive director of the Detroit NAACP, added, “If you don’t get this, you don’t get what’s necessary for urban revitalization. This issue has to go forward.”

A Path to Smart Growth
Many of the council’s other recommendations are similarly far-reaching, said council members, but also well within the boundaries of what the Legislature could support.

 The council urged the governor and the Legislature to:

  • Establish formal statewide land use goals, and that state agencies and local governments adhere to those goals in planning, making public investments, and making other decisions that affect development.
  • Modernize Michigan’s seven planning and zoning acts, all of which date to the 1920s and no longer serve their intended purpose of sensibly managing growth. Most actually encourage sprawling patterns of development.
  • Establish financial incentives to encourage local governments to improve their planning programs and to work with neighboring governments to plan and zone more cooperatively.
  • Develop incentives so that communities develop neighborhoods and business centers that are more walkable, more compact, and have a mix of homes, businesses, schools, and recreation facilities in close proximity. The idea is to make it possible for more Michigan residents to live their lives without first having to get into a private vehicle.
  • Ensure that local governments have the capacity to establish what it called “agricultural production areas” in order to provide economic incentives and land protection measures that encouraged farmers to keep farming.
  • Require state government to do a better job in overseeing the proliferation of large livestock farms in Michigan because of confirmed problems with water contamination and odor.
  • Encourage school boards to locate new schools in existing neighborhoods and not in farm fields far from town centers.

Race in Michigan
The council also wrestled with race in Michigan, which is now the nation’s most segregated state. Five of the most racially segregated metropolitan regions are in Michigan. The next closest state is New York, with four.

Rev. Kevin Turman, a council member and president of MOSES, a Detroit faith-based social justice organization, convinced the council to include in the final report a statement about the need to acknowledge and address race in Michigan as an important stimulus for causing people to choose where they live and work. Mr. Wheeler of the NAACP called on the council to approve a statement in the report that urged improvements in race relations, a motion unanimously accepted by the panel.

The Republican-led Legislature is expected to begin seriously considering the council’s recommendations when it returns in the fall. Panel members said they anticipated that several of the report’s recommendations could be implemented as early as the end of the year, but that the report is intended to guide decisions over the long-term. The majority of the recommendations would take several years to debate and enact.

Keith Schneider, a journalist, is deputy director of the Michigan Land Use Institute. Reach him at keith@mlui.org

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