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Michigan governor eyes bonds for $1.2 billion road plan

(Reuters) – Michigan Governor Rick Snyder is considering the use of bonds to speed up road and bridge projects under a $1.2 billion funding plan passed by state lawmakers on Tuesday, a spokeswoman for the governor said on Thursday.

“The governor has indicated that bonding is something he plans to explore and do a thorough analysis on,” said Sara Wurfel, the spokeswoman.

Snyder also wants to ensure that issuing bonds would not create longer-term challenges for the state in terms of increased debt service, she added.

The Republican-controlled legislature pushed through a seven-bill package that raises motor fuel taxes and vehicle registration fees to gain about $600 million in new revenue that could be tapped for state transportation revenue bonds.

The legislation also siphons off up to $600 million in state income tax revenue for roads, expands the homestead property tax credit and could reduce the 4.25 percent individual income tax rate depending on certain state revenue triggers, according to a legislative analysis of the bills.

House Democrats opposed the plan, saying it is “unsustainable and prioritizes tax breaks for the wealthy over funding for roads and critically important state programs.”

After a five-year phase-in, the plan would increase transportation funds by about $1.2 billion a year. But it will also reduce state general fund revenue by about $806 million annually, a Michigan House Fiscal Agency report said.

Wurfel said it would probably take a week or so before the bill package is reviewed and ready for signing by the Republican governor.

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