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If the Democratic-led Michigan Senate is unable to rally enough votes to increase taxes on marijuana — a key piece of a long-term road funding plan taking shape at the Capitol — then state government will shut down, Republican House Speaker Matt Hall said Thursday.
Speaking with reporters on the House floor, Hall said he was confident Democratic Senate Majority Leader Winnie Brinks would be able to gather enough votes for the measure. But he also drew a line in the sand when asked about building opposition to the measure in the Senate.
“Then the government will shut down,” Hall said. “I mean that’s what will happen. And that’s why I don’t think that will happen. I think Brinks has demonstrated time and time that she can perform and she never would have entered into an agreement and put out those two press releases if she couldn’t perform.”
The Michigan House voted 78-21 last week to pass a bill implementing a 24% wholesale tax on marijuana as part of a package of bills meant to create a long-term road funding plan. The tax is expected to generate roughly $420 million in revenue for roads, but marijuana groups have argued it would decimate an industry already struggling with oversupply and dipping prices.
The 24% increase is bad policy, will drive people into the illicit market and will cost the state jobs, state Sen, Jeff Irwin, D-Ann Arbor, said Thursday afternoon.
“Every day that goes by, there’s less support for this terrible cannabis tax,” Irwin said.
It would take 19 out of 37 senators to support the tax hike for it to advance to Democratic Gov. Gretchen Whitmer’s desk. Democrats hold 19 seats, but several senators have said in recent days that they’re interested in different ways to raise revenue for roads.
Irwin argued that the state budget plan could be changed up until the point the governor signs it into law.
“I think there are many reasonable ways that we can come up with revenue for roads that will actually be real revenue, rather than this illusory revenue that they’re estimating from a cannabis tax that will never raise the amount that they say it will raise,” Irwin said.
Hall argued Thursday it was Brinks who suggested the marijuana tax as one of the revenue sources the Senate might support for roads. Whitmer first proposed the tax earlier this year, calling for a wholesale tax rate on marijuana similar to what is already levied on tobacco products. The wholesale tax on tobacco is 32%.
“We took them up on their suggestion of marijuana, we’ve all made a deal on the budget and Winnie Brinks would never make that deal if she couldn’t perform,” Hall said.
Hall also said he would not agree to a proposed amendment sitting in the Senate that would lower the proposed 24% wholesale tax on marijuana to 20% and tie it to a separate bill taxing vape products.
“We made a deal on what all this was and we finalized that deal,” Hall said. “If they tried to change the terms of the deal, we would strip it out and we would send it back the way it was. Because there are hundreds and hundreds of things that we could renegotiate in the deal but then the government would shut down.”
Earlier Thursday, Hall said there won’t be a second stopgap funding measure for state government “under any circumstance,” setting a deadline for lawmakers to send Whitmer an annual budget by 12:01 a.m. Wednesday.
On Tuesday night — the final day of the last fiscal year — legislators failed to approve a budget and instead approved a one-week funding plan at 2 a.m. Wednesday to allow negotiations to continue, avoid a government shutdown and keep state government operating until Oct. 8. Whitmer signed the spending bill into law around 4 a.m. Wednesday.
“There will not be a second continuing resolution under any circumstance,” Hall said Thursday morning.
Hall wouldn’t commit to providing lawmakers a certain amount of time to review the bills before a vote later Thursday.
Facing the new Oct. 8 deadline, which is six days away, Whitmer needs time to conduct a legal review of the spending bills before signing them, Hall said.
“So we will do our best to balance all of that and give members as much time as possible, but still try to get this done without a second government shutdown,” Hall said.
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