Whitmer’s $3.5B borrowing plan would cost taxpayers $1.5B in interest payments

Whitmer’s $3.5B borrowing plan would cost taxpayers $1.5B in interest payments

The Michigan Senate Appropriations Committee chairman said the governor's $3.5 billion bonding plan would cost a total of $5 billion when accounting for interest payments.

When Michigan Gov. Gretchen Whitmer circumvented state lawmakers to borrow $3.5 billion for roads and bridges, it seemed like a lot for funds she’s only allowed to use on less than 10% of the state’s roads. Now the true cost of her plan is coming out and it’s even higher.

Whitmer’s plan will cost Michigan taxpayers $5 billion when $1.5 billion in interest is added to the original $3.5 billion bond, Senate Appropriations Committee Chairman Jim Stamas, R-Midland, estimated. That $1.5 billion in interest is enough to cover the budget for Detroit Public Schools, the state’s largest district, for nearly two years.

Instead of that money staying with taxpayers or going to fund public services, it is being spent to finance a debt the governor took on by doing an end-run around Michigan’s spending safeguards and taxpayers’ elected representatives.

“Michigan families need an affordable solution that fixes the roads and doesn’t saddle them with decades of debt,” Stamas said in a statement. Michigan’s Constitution intended for the people to be consulted in transportation bonding decisions, he said.

“This year, just four months after she vetoed a $400 million increase to fix local roads, the governor rushed a $3.5 billion road bonding scheme – which will cost taxpayers over $5 billion to pay off. Bonding is a financing tool that creates debt. It’s not a long-term funding plan to fix the roads.”

Whitmer circumvented both voters and lawmakers when she pressed the State Transportation Commission to issue $3.5 billion in bonds that can only be spent fixing freeways and trunkline roads, which are less than 10% of the roads in Michigan. She announced the plan during her State of the Union address Jan. 29, with the new bonds being authorized less than 24 hours later by an appointed board in a move that avoided approval by either lawmakers or voters.

State lawmakers are now trying to stop Whitmer or others from using that bypass in the future. Senate Bill 716, filed by state Sen. Roger Victory, R-Hudsonville, would automatically give lawmakers the chance to veto any bonding proposal of $100 million or more from the commission. It passed the Michigan Senate and has moved on to the House Committee on Transportation.

With unelected officials making decisions that will saddle future generations not only with debt, but with billions in interest on top of that debt, Michigan needs commonsense limits like these. Right now, each taxpayer in Michigan already shoulders $17,000 in state debt that they’ll ultimately need to pay off through higher taxes, according to fiscal watchdog Truth in Accounting. That’s the second-highest burden in the Midwest, behind only Illinois.

Reforms like Victory’s SB 716 would make it difficult for such unilateral action to be taken. It would curb the debt burden of Michiganders.

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