Economist: State Road Funding Proposal has Hidden Costs

DETROIT, MI (WHTC) – East Lansing economist Patrick Anderson says the vehicle registration fees paid in the state will no longer be deductible on federal income tax returns if the May 5^th ballot proposal passes. He told the “Detroit News” that the road funding deal changes the fees from an “ad valorem” tax, based on the value of property, to an excise tax. While the sales tax hike and additional measures are expected to bring in 1.2 billion dollars a year for roads, Anderson says it would cost taxpayers roughly 102 million dollars on their federal tax returns. Lawmakers who drafted the proposal say that they were aware of this development, but that the plan is still the “least painful option.”