A Project of The Annenberg Public Policy Center

Trading Jabs in Michigan


Republican Terri Lynn Land and the Democratic Party trade barbs in the Michigan Senate race, but both ads mislead voters.

  • Land’s ad blames Peters for the fact that “Michigan gas taxes are siphoned off by Washington instead of staying here and being spent on Michigan’s crumbling roads.” But Michigan got a return of $1.03 on every highway dollar spent on federal gasoline taxes in 2012.
  • An ad from the Democratic Senatorial Campaign Committee, meanwhile, claims Land “said guaranteeing equal pay for women who do the same work as men is not a good idea.” Land actually said she supports equal pay for equal work, but the Democratic-sponsored Paycheck Fairness Act wasn’t “a good idea.”

The race to replace retiring Sen. Carl Levin is shaping up as a tight battle, with the polling tabulator Real Clear Politics rating it a “toss up.” As a result, both the DSCC and its counterpart, the National Republican Senatorial Committee, have invested heavily in the outcome.

 ‘Siphoning Off’ Gasoline Taxes?

An ad from the Land campaign accuses Peters of supporting a system that allows Michigan gasoline taxes to be “siphoned off by Washington.”

According to the ad’s narrator, “Every Michigan driver knows our roads are a mess. On Congressman Gary Peters’ watch, Michigan gas taxes are siphoned off by Washington instead of staying here and being spent on Michigan’s crumbling roads. Washington’s Gary Peters doesn’t put Michigan first, but Terri Lynn Land will — taking on Washington waste so our tax dollars go to address our needs, like finally fixing our roads.”

That sure makes it seem like Michigan is getting back less in highway funding than its residents pay in gasoline taxes. But the Federal Highway Administration reported that, in 2012, Michigan received $1.03 in highway funding for every $1 in federal highway gasoline taxes collected in the state. Michigan’s return on investment was even better in 2010, according to the Federal Highway Administration, when the state received $1.30 in highway funding for every $1 in federal gasoline taxes it collected; and $1.20 for every $1 in 2011.

In reality, the ad oversimplifies an ongoing battle over federal funding of highways.

Land’s point isn’t just about return on investment, but also increasing local control of highway spending. On her campaign webpage, Land advocates a plan to gradually reduce the federal tax of 18.4 cents per gallon to “around 4 cents.” States could then replace that with a commensurate state gasoline tax, or some other tax, thereby “let[ting] states decide” how to spend those transportation dollars in Michigan. Land’s plan is similar to one championed by Republican Sen. Mike Lee and Rep. Tom Graves called the Transportation Empowerment Act. They propose to reduce the 18.4 cents per gallon tax on gasoline to 3.7 cents per gallon over five years.

The Transportation Empowerment Act is opposed by the American Roads and Transportation Builders Association, which says that while Land and other proponents say the idea is not to cut transportation funding — that state taxes would be expected to replace the loss of federal revenue — there is no requirement for states to do that. It would be politically difficult for state legislators to replace that funding, Beth McGinn, a spokeswoman for ARTBA told us. And as a result, she said, Michigan could wind up with a big drop in highway funding.

The way things work now, the federal government collects a tax of 18.4 cents per gallon on gasoline and 24.3 cents per gallon of diesel fuel and puts it into the Highway Trust Fund. Most of that money (15.44 cents of the 18.4 cents) is allocated to state departments of transportation to “design, construct, improve and preserve” major roads. So the states determine which projects get money, not the federal government.

There is a caveat, however. The federal dollars “cannot be used for routine maintenance such as filling potholes or removing snow.” Land’s ad specifically shows images of potholes, and it’s true that the state cannot spend federal money to fix them. In addition to federal gasoline taxes, every state tacks on its own gasoline tax, though the amounts vary by state. That money, and other levies determined by state government, can be used on routine maintenance.

Since 1982, part of the federal gasoline tax revenues has been earmarked for mass transit expenses. Just over 15 percent (2.86 cents of the 18.4 cent per gallon) of the federal gasoline tax has been set aside for mass transit since 1993. That money is used to “construct and improve subway, light rail and other mass transit systems, purchase buses and make other capital improvements.”

It’s true that Northeastern states with large mass transit networks have historically claimed a disproportionate share of those mass transit dollars, but Michigan has gotten some of that money as well. Examples cited by the U.S. Department of Transportation include $32 million of the $40 million cost of Grand Rapids’ new Silver Line Bus Rapid Transit system, which opened this month; and $25 million, in 2013, to help support a new streetcar line along historic Woodward Avenue in downtown Detroit.

According to Amy Bernstein, a spokeswoman for DOT’s Federal Transit Administration, Michigan contributed $154.7 million to the Mass Transit Account (MTA) from gasoline taxes in fiscal year 2012 (the most recent data available). In FY 2014, she told us via email, Michigan received mass transit allocations, based on formula, totaling $132.2 million from the MTA. However, she said, “Michigan is also a candidate for competitive discretionary funds derived from the MTA. So altogether, Michigan would be in line to at least break even on its contribution to the MTA.”

So while not all of the federal gasoline tax goes toward highways, the mass transit money isn’t necessarily “siphoned” away from Michigan. As we mentioned earlier, of the federal gasoline taxes earmarked for highways — 15.44 cents of the 18.4 cent tax — Michigan gets back all of that money, and then some, in highway funding.

Some states have consistently fared better than others in the return on gasoline tax investment. Alaska, for example — which has fewer residents, but large areas to cover with roads — got back $5.92 for every $1 in federal highway gasoline taxes collected in the state in 2012. The donor vs. donee debate over how to equitably distribute highway funds goes back decades. But according to a Congressional Research Service report in 2011, between 2007 and 2009 “all 50 states were donee states, because outlays from the Highway Trust Fund exceeded federal highway tax receipts in each year.” That’s because the federal government has supplemented the highway budget with money other than gasoline taxes (the American Recovery and Reinvestment Act, for example, included a huge infusion of extra highway funding).

The FHA data suggests that, in 2012, only four states — Arizona, South Carolina, Texas and Utah — got back less than $1 for highway funding for every $1 the state’s residents paid in federal highway gasoline taxes.

So why is Land complaining about Michigan?

Proponents of the Transportation Empowerment Act, such as the conservative Heritage Foundation, argue that the return-on-investment data from the FHA is skewed because the federal money comes with strings attached, namely requirements to pay laborers locally prevailing wages and to comply with federal environmental impact laws. While some conservatives argue such requirements add undue costs to projects, the degree is a matter of some debate, as our colleagues at PolitiFact Georgia found when it looked into a similar issue in March.

The cost of those federal requirements is a legitimate political issue, but the ad goes too far when it says “Michigan gas taxes are siphoned off by Washington instead of staying here and being spent on Michigan’s crumbling roads.” The fact is, Michigan has received slightly more than $1 worth of highway funding for every $1 spent on federal gasoline taxes earmarked for highways. The states decide which roads projects will get that funding, though it cannot be used for routine maintenance such as pothole repair.

 Equal Pay ‘Not a Good Idea’?

An ad from the Democratic Senatorial Campaign Committee, meanwhile, targets women voters with an ad mocking an earlier Land ad in which she concludes, “As a woman, I might know a little bit more about women than Gary Peters.” Republican pollster Frank Luntz called Land’s ad the “worst ad” of the political season.

In the DSCC ad, several women hold up iPads playing that line from the Land ad, and then go on to attack Land as out of touch with Michigan women on abortion and equal pay.

One woman claims “Land doesn’t think women should have the right to choose, even in the case of rape or incest.” Though she has not explicitly stated her opposition to those exceptions, Land received the endorsement of the Right to Life of Michigan — which makes its endorsements conditional on limited abortion exceptions. The group’s endorsement criteria says, “First and foremost, a candidate must be prolife with no exceptions other than life of the mother.” In addition, Politico wrote in February that Land “also said the ‘only exception’ she supported for abortion was to save the life of the mother, not mentioning rape or incest.”

But then, another woman in the DSCC ad says, “Terri Lynn Land said guaranteeing equal pay for women who do the same work as men is not a good idea.”

On screen, the ad shows a picture of Land and says: “On guaranteeing equal pay: ‘I don’t think that’s a good idea.'” The ad cites an April 12 article in the Wall Street Journal as backup. But that article makes clear that Land’s “not a good idea” comment was referring to the Paycheck Fairness Act, a Democratic bill, not to the idea of equal pay. The article even notes Land’s stated support for “the principle of equal pay for women.”

Wall Street Journal, April 12: HOWELL, Mich.- Criticized by President Barack Obama this week for her stance on equal-pay policy, Republican Senate candidate Terri Lynn Land of Michigan said here that she supports the principle of equal pay for women but would have voted against the Paycheck Fairness Act debated in the Senate this week.

The bill, which was blocked by Senate Republicans, would have allowed employees to discuss their pay without potential retaliation and required employers to show that salary differences aren’t based on gender bias.

“I don’t think that’s a good idea, so I wouldn’t have been supportive,” Ms. Land said in an interview Friday evening with The Wall Street Journal. She said she opposed the bill because “that would require that businesses have to post the pay of each individual so it was public… I don’t think you should have to have everyone know what your pay is.”

The bill contains no such posting provision, though supporters said women would be able to ask their human-resources departments for pay information about male workers. Ms. Land’s concern wasn’t among the objections raised by Senate Republicans, who said the bill would have duplicated exiting protections in law and would have opened businesses to new lawsuits based on legitimate decisions about pay.

In other words, Land is not convinced that the Paycheck Fairness Act is the way to go about achieving equal pay for equal work for women. She says on her website that she supports enforcement of the laws that are already on the books to address pay inequity: the Equal Pay Act of 1963 and Title VII of the 1964 Civil Rights Act.

People may disagree with her  — or object to her ill-informed belief that the bill would have required employers to post employees’ pay — but Land never said “guaranteeing equal pay for women who do the same work as men is not a good idea.”

— Robert Farley