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Tue August 14, 2012
Bridging the border: Who pays? (part 2)
There’s been a lot of confusion about how much a new bridge across the Canadian border at Detroit might cost taxpayers. TV ads say it will cost Michigan taxpayers $100 million a year. The governor says it will cost Michigan nothing.
Gov. Rick Snyder has been trying to tell everyone he can that the New International Trade Crossing linking Detroit to Canada will mean more and better jobs in Michigan. In this online video promoting the idea, he says Canada is fronting the money for the $2 billion bridge, including the cost of Michigan’s road connections to that bridge.
“There’s no obligation to Michigan taxpayers, not using taxpayer dollars at all because of the Canadians. And we need to be thankful to the Canadians. They are advancing the expenses on the Michigan side which will be repaid from tolls. So, there’s no Michigan taxpayer dollars being used for this project. Which is great.”
But, the governor is being drowned out by a massive television ad campaign that says something completely different.
“So who pays? You do. Billions now, then $100 million every year. Here’s a better plan. Stop the government bridge. We don’t need it and we can’t afford it.”
That ad and others like it are sponsored by the owners of the Ambassador Bridge, billionaire Matty Moroun and his family. TV ads like this one have been airing across the state for more than a year.
“It’s completely false,” says Lt. Gov. Brian Calley.
He’s the governor’s point man on the bridge project.
“It is a lie. They know it is. They know what the answer is. If you piece together the different things that spokespersons for the Ambassador Bridge company have said publicly, you know that they understand that Michigan is not on the hook for any of this and yet they continue to propagate those lies,” Calley said.
And the Canadians also insist these TV ads and what the Ambassador Bridge company owners are saying is just wrong.
“They keep saying it’s going to cost Michigan $100 million a year. It will cost Michigan zero dollars per year. Canada assumes the liability. And if tolls aren’t sufficient to pay the cost, Canadian taxpayers pay the shot,” said Canadian Counsel General-Detroit, Roy Norton.
Even with Michigan officials and Canadian officials saying there will be no Michigan taxpayer money involved in the project, the owners of the Ambassador Bridge insist Michigan taxpayers are going to pay. Matthew Moroun, the son of Matty Moroun appeared on WDIV-TV’s Flashpoint program last March.
“If you listen carefully to the sales pitch for the government bridge, it’s let’s use some Canadian money, let’s use some Michigan money that’s already been spent, about $45 million. Then, let’s run to Washington, D.C. and grab another $2 billion of taxpayer money. So, you know, we have to start realizing whether it’s Michigan taxpayer money or federal taxpayer money, it’s all coming out of our pocket and our future pocket,” Moroun said.
So what’s he talking about?
Here’s a breakdown of the argument:
- First, a new bridge would draw some traffic away from the other publicly owned crossings. The Ambassador Bridge owners argue that would mean fewer tolls taken and that could endanger bond payments for those crossings, leaving Michigan taxpayers to make up the difference.
- Second, the new bridge would attract traffic from the Ambassador Bridge which would mean less money for the Morouns and they’d pay less in taxes to Michigan.
- Third, they argue land that would be used for the new bridge and the customs plaza is on the tax rolls now and that revenue would be lost.
Ambassador Bridge spokesman Mickey Blashfield says those state and local revenues would be lost.
“That’s money that is in the public coffers today that would be siphoned off with a new bridge. Not to mention the $265 million cost of a customs plaza that would be paid for with federal tax dollars and last time I checked, Michigan taxpayers are federal taxpayers let alone the cost of about $100 million a year to turn the lights on and staff a new, independent customs facility. Other than that, the bridge would be free and that’s the absurdity of this argument. There is no such thing as a free bridge and we’ll continue to pay for it.”
So, whether it’s local real estate taxes or federal dollars for the customs facility, the Ambassador Bridge company argues Michigan taxpayers pay local, state, and federal taxes, so the new bridge would cost them.
Their TV ads don’t quite explain in that kind of detail.
But it all resonates with a group closely allied with the Ambassador Bridge and the Moroun family. The Americans for Prosperity-Michigan says the New International Trade Crossing is not needed now. And if a second bridge is needed, the Ambassador Bridge company can build it.
Scott Hagerstrom is the group’s state director.
“I think that should be up to the laws of supply and demand and capitalism, not up to government politicians. Let supply and demand and the private sector make that determination.”
Hagerstrom says even if the only cost is the U.S. Customs plaza, that’s taxpayer money that doesn’t need to be spent. He opposes the proposed publicly owned bridge and instead supports the Moroun family’s plan to build a second span alongside the Ambassador.
“Why is the government so threatened? Here we have a shining example of a facility that was built with private funds, has operated successfully for over 80 years privately. That’s a shining example. Let’s emulate that and do that more instead of trying to shut them down. Let’s take taxpayers off the hook.”
So, for the Americans for Prosperity-Michigan, this is purely an ideological point. No tax dollars no matter what the benefit to Michigan or its economy. Let the market forces decide.
While the business community and many other groups say this Canadian bridge deal couldn’t be any better for Michigan, there is more to it than just getting Canada to pick up the tab for Michigan’s highway connections to the bridge.
That $550 million Canada is fronting can be used by Michigan as matching funds for federal highway dollars. That’s enough money to get the maximum match for five years. Michigan hasn’t come up with enough money for the maximum match for the last three years. It would amount to $2.2 billion dollars in federal highway money at no cost to the state of Michigan.
You might be saying, it’s still tax dollars. That’s true, but a point should be made here. According to studies by the Tax Foundation, Michigan is a donor state. In other words for every dollar we send to Washington, we get less than a dollar back. This would be a chance to get some of the federal taxes we pay back to fixing roads in Michigan.
The governor has been trying to explain this point every chance he gets. But many people don’t understand what he means. Meanwhile the Moroun family is spending millions of dollars to persuade people Michigan has something to lose rather than something to gain.