Thursday, May 7, 2015

State Rep: We Can Fix Michigan's Roads With Out Raising Taxes

Representative Peter Lucido (R-District 36) was on the Frank Beckmann program today on WJR-
Peter Lucido
760AM  and he stated that former Gov. Engler did  tap into the INTEREST in the Michigan Catastrophic Claims Association (MCCA) fund to give the taxpayers a rebate when the fund had $5 billion in its account which now has over $18 billion in its account.

Taking interest money will NOT in any way draw from the MCCA's continuously growing PRINCIPLE that it receives through the taxpayers vehicle insurance premium payments.

Representative Lucido’s idea would nix Lansing from coming up with laying additional tax burdens on Michiganders.

Michiganders pay more for insurance than the rest of the country and 2 times more than the national average.

via Peter J. Lucido - May 5 ---
"The citizens of Michigan have spoken very clearly: They want the roads fixed without raising taxes.
I am introducing a bill Wednesday in the House. This plan has been referred to previously as Plan B. Today I want you to realize it is now called Legislator Lucido’s Plan.
My plan is simply with no confusing parts tied to it. Today the plan could use the annual INTEREST ONLY from the Michigan Catastrophic Claims Association which is approximately one billion dollars annually. This is more than enough to get the roads, infrastructure, and transportation repaired and maintained WITHOUT HAVING TO TAX THE FAMILIES OF MICHIGAN.

What are we waiting for? We do not need gridlock and further delays to solve our road dilemmas. Do you agree? Please post your thoughts, share this post, call your legislator, and LET'S GET THESE ROADS FIXED TOGETHER!"


  1. Yeah, except that the vehicle insurance premium payments fluctuate, up and down, based on the premiums paid, interest earned, claims payed out, estimates for future claims, etc. In fact, the yearly premium payment per vehicle is set to be reduced from $186 to $150 this year.

    Sure, you could raid the interest from the fund, but that just means that the premiums will have to be increased again to cover the shortfall due to the lack of interest income that can be used to pay out claims.

    There's no free lunch, Ron.

  2. Matt you are not grasping the concept, the monies would be taken from the interest already there in the fund and perhaps for a short period of time. There is currently $18 billion in surplus dollars in the fund. No principle would be taken from the fund. This fund is overfunded that is why they are looking at dropping the principle being collected. Honestly we could go a few years with out them collecting and the fund would still be overfunded.

  3. No, Ron, I am fully grasping the concept. The MCCA fund is intended to pay for present and future liabilities, i.e., injured people. If you raid the interest to pay for road and bridge, they won't have that money to pay their obligations, the aforementioned injured people. Therefore, the premium we pay will be higher.

    With this rob-Peter-to-pay-Paul scheme, you and I are still going to pay more. But MDOT still won't have a long-term, comprehensive funding scheme which would allow them to move up projects. So that means more roadway band-aids then real fixes.

  4. Matt you are wrong. First of all the MCCA Fund is overfunded at $18 billion. Again we could actually go several years with out funding the MCCA and it will still be over funded with the current level of payouts to those that are receiving lifetime benefits. However we are not talking about not funding it. In fact it will still be funded with the fee we all pay on our insurance policies. Peter Lucidos plan is to tap into the interest in this fund for a short period to pay for the roads. In all reality it would behove us to do this as repairing the roads would make them safer, hence preventing accidents that lead to injuries therefore saving us from taking monies from this fund to pay for those injuries.

  5. What exactly am I wrong about?

    Ron, the money to fix the roads must come from somewhere. It can come from sales taxes, vehicle registration fees, fuel taxes, income taxes, auto insurance premiums, interest being paid to the MCCA fund, and/or other sources. But it must come from somewhere.

    And where do you and Rep. Lucido get this notion that the MCCA fund is "overfunded" by $18 billion? According to their financial statements, the MCCA does have just under $18 billion in assets, but they also have $18 billion in liabilities. Their financials do show a surplus of $410 million, which is probably why they plan to lower premiums paid by vehicle owners by $36 this year. Investment income last year was $778 million. Take that away and, *poof*, there goes the $410 million surplus ... and the lower premiums for this year.

    So instead of a "tax increase", the Lucido plan would simply cause a "premium increase" or, at best, no premium reduction, which is scheduled to happen this year. A tax is a tax is a tax, no matter where you get the money from.

  6. Well Lucido's plan is a moot point but monies were found that didn't involve the increase in taxes. Funny how that happened especially when legislators found out they would have to work this summer rather than be on summer break.