The Herald Bulletin

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March 20, 2013

In Michigan, GOP governor finds a tax to like

LANSING, Mich. — Michigan's venture capitalist-turned-governor, Rick Snyder, needed just five months in office to slash his state's business taxes. Elected on the downside of the recession, he was among a crop of new Republican leaders eager to show they could boost their states' ailing economies with lower taxes.

But two years later, confronting one of the automobile-addicted state's most visible problems — crumbling roads — Snyder has roiled conservatives by calling for a major tax increase.

He has proposed boosting the gasoline tax from 19 cents to 33 cents a gallon and hiking car license plate fees by 60 percent, firmly grabbing what many politicians consider a third rail for consumers — gasoline prices.

"This is common sense," he declared during his budget proposal, adding, "we need to make this investment."

Although a break from the GOP's anti-tax ideology, Snyder's move shows a dicey willingness among some Republican officials to begin raising more revenue. They are a distinct minority in the more than two dozen states the party dominates. But those treading this path are governors facing difficulty delivering basic services, especially roads, with budgets that are strained and must be balanced.

They insist there are actually some taxes that government should rely on more — and that even Republicans can embrace.

In Virginia, GOP Gov. Bob McDonnell recently won approval for overhauling his state's highway maintenance system by raising diesel and retail sales taxes and creating a mechanism for a potential future gasoline tax hike. Pennsylvania Republican Gov. Tom Corbett has called for increasing a wholesale gasoline tax, with most or all of the increase passed to drivers.

Conservative economists disdain higher tax rates for siphoning off money they say would be available for economic activity. But gasoline taxes, some Republican officials say, are a lesser evil because the money traditionally doesn't wind up in general spending, but rather in building infrastructure, which helps boost economic development.

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