What is Proposal 1?
Proposal 1 is what you've probably heard of as the sales tax hike that will fund road repairs.
But, it's more than that.
Passing Proposal 1 would generate revenue in more ways than raising the sales tax, and it would also fund more sources than the road repairs.
Right now, when you go to the gas pump you're paying both a sales tax and a fuel tax. Passing Proposal 1 would eliminate the sales tax and increase the fuel tax. Passing Proposal 1 would also increase vehicle registration fees.
In addition to funding road repairs, the proposal is also about funding schools, local governments and a tax break for low-wage earners.Here's the wording that you'll find on the ballot:
A proposal to amend the State Constitution to increase the sales/use tax from 6% to 7% to replace and supplement reduced revenue to the School Aid Fund and local units of government caused by the elimination of the sales/use tax on gasoline and diesel fuel for vehicles operating on public roads, and to give effect to laws that provide additional money for roads and other transportation purposes by increasing the gas tax and vehicle registration fees.
The proposed constitution amendment would:
- Eliminate sales/use taxes on gasoline/diesel fuel for vehicles on public roads.
- Increase portion of use tax dedicated to School Aid Fund (SAF).
- Expand use of SAF to community colleges and career/technical education, and prohibit use for 4-year colleges/universities.
- Give effect to laws, including those that:
- Increase sales/use tax to 7%, as authorized by constitution amendment.
- Increase gasoline/diesel fuel tax and adjust annually for inflation, increase vehicle registration fees, and dedicate revenue for roads and other transportation purposes.
- Expand competitive bidding and warranties for road projects.
- Increase earned income tax credit.
VIDEO: Learn more about Prop 1 from Gov. Snyder as he sits down with Huel Perkins, Charlie Langton and Charlie LeDuff for a special 'Let It Rip'
The Associated Press contributed to this report.