Hohman in LSJ: Road Tax Hike to Fund Medicaid Expansion

The gas and vehicle registration tax hikes lawmakers agreed to last fall could essentially be used to pay for the state’s Medicaid expansion, Mackinac Center’s James Hohman argues in an op-ed published by the Lansing State Journal today.

Because the tax hikes — projected to bring in more than $533 million in their first year — will not take effect until 2017, legislators dedicated $400 million in general fund money to roads. Once the increased tax revenue rolls in that $400 million general fund allocation will pay for Michigan’s Medicaid expansion and increases in the Department of Health and Human Services and K-12 education budgets, according to the executive budget.

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Hohman explains the problem with transferring one-time expenditures:

The $400 million the Legislature directed to transportation was marked as a one-time expenditure, and thus should be considered nontransferable. But unless the revenues used for that one-time expense dries up the following year – a dubious claim to make about a growing general fund – then labeling it as a “one-time” decision meant that the money would be available to use elsewhere next year.

Read the full op-ed in the Lansing State Journal.

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