The state has enacted its 2004 budget, and Michigan’s motorists are going to contribute over a quarter billion dollars more to help balance the books. Virtually none of this money will go for roads. At least 10 road-user tax and fine increases have been passed so far by the new legislature and signed by Governor Granholm:
• Driver’s license fees will rise by $6 for renewals, and $13 for
new licenses.
• Vehicle registrations will go up by $3.
• Driver’s-license points (over 6) will be taxed $100 to $300/year.
• Surtaxes on all traffic fines will rise from $25 to $40 per conviction.
• Late driver’s-license renewals will cost $7 extra.
• Late license-plate renewals will cost $10 extra.
• Title fees will rise by $3.
• Trailer registrations will rise by 500% (but become permanent).
• Some traffic fines will rise by $300 to $2,000.
• Vehicle-dealer fees will rise by $5,300,000, to be passed on to car
buyers.
These increases were introduced, debated, passed and signed with record speed and little press or public notice. Afterward, some legislators claimed they weren’t aware they had enacted so many tax increases.
Debtor’s Prison for Low-income Drivers
The biggest and most obnoxious tax increase is the “Driver Responsibility
Fee” sponsored by Sen. Jud Gilbert (R–Algonac) in Senate Bill 509.
This is a tax on driver’s-license points, and massive increases in fines
for certain violations. The seventh point will be taxed $100 per year, and additional
points cost $50 each. (Most speeding tickets generate 2 or 3 points, and violating
a signal or stop sign yields 3, so the third or fourth ticket within two years
will be taxed.) Unlicensed or uninsured operation will cost $1,000 above usual
fines. Serious violations like drunk driving; or hitting a construction worker,
cop, or farmer (but not other people) are surtaxed $2,000. Failure to show proof
of insurance now costs $300 plus fines, costs and the $40 surtax (even if you’re
insured) so be sure you can lay your hands on that little slip of paper when
the officer asks for it.
These new charges are called “fees” so that the state can keep
the whole amount for its General Fund, instead of sharing it with local governments
and libraries, as the Constitution requires for fines. Judges aren’t able
to reduce the “fees.”
Drivers who refuse to send money annually on their birthdays will lose their
licenses. The legislature estimates that drivers will get annual bills of around
$125 million when it takes full effect after two years (existing points aren’t
taxable), but that refusal to pay will reduce the take to less than $70 million.
However, the House Fiscal Agency estimate appears to be off by 100 per cent,
so NMA estimates the annual charge at twice that, or $250 million.
The points-tax idea came from New Jersey. New Jersey social workers call this
program “debtor’s prison,” for the hopeless cycle that some
low-income drivers fall into. Drivers who don’t pay fines and get caught
driving without a license or insurance incur $1,000 fees that must be paid before
the license is restored. Repeat violators get so far in debt to the state that
they can never get a license again, which reduces their employability.
Flushing this much money through traffic courts will further corrupt the system.
Judges have no discretion over the surtaxes, which have to be paid to the state
even if the fine is reduced for cause. Motorists will have increased incentive
to fight tickets. Prosecutors faced with clogged courts will be eager to make
deals, but will have an increased profit margin if they split the costs of the
surtaxes with motorists in return for a plea to a no-points charge.
Higher Fees, Lower Road Spending
Senate Bill 554 contained dozens of small tax increases on everything from driver’s
and chauffeur’s licenses to vehicle titles, registration fees, and business
licenses for junkyards. Trailer license plates will become permanent (or until
the trailer changes hands), but the fees will increase by 500 per cent. Motorists
will be charged “late fees” for failing to renew licenses and registrations
on time. Part-year plates will no longer be available. It’s still unclear
whether motorists who store their vehicles for long periods of time will be
charged the $10 late fee for not paying road-use fees they don’t owe.
All this chiseling adds up to over $65 million/year in higher taxes. About a
third of this money is credited to road improvement.
Questionable Constitutionality
Of the $3 increase in registration fees, $2.25 is to be credited to the new
Traffic Law Enforcement and Safety Fund, “to enhance enforcement of traffic
laws” and “to enhance the ability to provide safety on the streets
and highways of this state.” The Michigan Constitution restricts vehicle
taxes to exactly four uses: road construction, transit, regulatory fees (like
the underground-tank fee) and the cost of collection. It’s debatable whether
calling a tax a fee is sufficient to award this money to the State Police. It
remains
to be seen whether cities and county road commissions will sue to reclaim this
money for roads and streets.
For a while, the Administration budget included a small gas tax for the General
Fund. Michigan’s tenth-of-a-cent-per-gallon tax that pays for cleaning
up contaminated gas stations expires soon, and the Governor’s budget writers
assumed it could be replaced with an equivalent General Fund gas tax without
anyone noticing. The Administration budget was delayed for a week when they
realized that this wouldn’t fly. The Governor got a free pass from the
media, who never discovered that she proposed to tax gasoline for general government
spending, a major change in state policy.
In recent flush years, some General Fund money had been allocated to roads and
transit. Every cent of this not protected by the Constitution was snatched back
when the going got rough, about $80 million’ worth.
The Grim Bottom Line
What’s the bottom line for motorists? The fee increases were small, and
voters won’t find them burdensome. But traffic fines now contribute a
bigger share to a longer list of government functions:
city government, township government, county government, local police, county sheriffs, State Police operations, college-town fire departments, local libraries, judges’ training, judges’ retirement, court operations, the Supreme Court, the Department of Corrections legislative retirement, colleges and universities, and state government generally.
All these interests get a cut when you get a ticket, and each of them will
lobby against ever reducing traffic fines.
With more to gain from each ticket, these interests may press for lower speed
limits and stricter traffic enforcement. Photo radar will become hugely attractive
as a revenue source.
More tickets will mean higher insurance premiums. Driver’s licenses and
insurance will be harder to get and keep. Michigan will have an ever-larger
permanent underclass of unlicensed, uninsured, and unregistered drivers who
can only be kept off the roads by jailing.
In short, the Michigan state government is turning to motorists as a new revenue
source. The quarter billion more dollars a year that motorists will pay in 2004
is only the beginning of what we’ll pay if ticket-writing is ratcheted
upward.
What Else Could Happen?
Legislators were occupied by the budget until July. Now that the tax increases
have been signed, they’re free to turn to other causes. These issues are
still hanging fire:
Automated Tickets – HB 4864 would legalize photo radar and red-light
cameras at ten test intersections to be selected by MDOT. Disguised as a test,
this is a way to force the door open for universal issuance of automated tickets.
Even if the “test” shows no safety improvement (or a worsening of
safety), the money-making cameras would not be removed.
Double Speeding Fines – HB 4135 would double speeding fines in any “residence
district.” Because of sloppy drafting, this bill would double speeding
fines on any roads with houses.
Diesel Tax – SB 387 was largely forgotten by the legislature, but it would
raise the Diesel fuel tax by 4 cents/gallon.
Some newspapers and Republican legislators are making a crusade over the number
of uninsured motorists, which is thought to average around 15 per cent and exceed
50 per cent in some neighborhoods. HB 5045 would double the fine for uninsured
operation, up to $400 to $1,000 (plus the $1,000 surtax already enacted). SB
638 would rescind registration of vehicles on which the insurance lapses.
House Democrats responded to high insurance prices with a proposal to outlaw
insurance rate territories and regulate rates (HB’s 4813-14 and 4836-42).
But this may not work, either, and is not likely to get any attention in the
legislature.
Townships Intrude on Speed Law
For several years, some townships have wanted “a seat at the table”
when speed limits are set on county roads within their boundaries. They got
their wish this summer when Governor Granholm signed P.A. 65 (HB 4224), which
changes the way speed limits are set on county roads. Similar legislation had
been vetoed by Governor Engler.
Previously, speed limits on other than state highways and city streets were
set by county road engineers and the Michigan State Police (MSP) “upon
the basis of an engineering and traffic investigation.” State officials
call this a “speed study,” and it usually means a test with radar
to determine the 85th-percentile speed, which may or may not guide the posting
of the limit. Some counties post reasonable speeds, others don’t.
Some townships want to change 55- and 45-m.p.h. speed limits to 35 or 25 m.p.h.,
and they imagine that this bill will give them leverage to force county and
MSP officials to cave in. But the new law requires the three agencies to “unanimously
determine” speed limits, so county and state officials can still stonewall
township officials who want unreasonable limits to placate homeowners or operate
speed traps. No limits will change unless all three agencies agree.
No one knows how this junky new law will work. In the majority of townships,
who don’t care about speed limits, nothing may change. Practically, it
may mean that no limit will ever be changed in places where township boards
insist on unworkable limits. Unposted roads may remain at a default 55 m.p.h.