Donald W. Reynolds National Center For Business Journalism

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Unions fight business with tax hike threat

August 5, 2015

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Michigan's awful roads. Photo by Flickr user Matt Clarin

Unions in the Midwest have had a difficult time in recent years. Wisconsin eliminated collective bargaining rights for state employees, fueling Republican Gov. Scott Walker’s run for president.

Michigan and Indiana instituted Right To Work laws. And, Ohio initially followed Wisconsin’s lead, although voters repealed the effort to ban state employees from bargaining.

Now, in Michigan, a small group of unions has banded together to launch a petition drive for a ballot campaign to push back against Republican-backed business interests.

The proposal would almost double the state’s corporate income tax, with the new revenue to pay for road funding.

Roads in Michigan are terrible, and state residents are fed up with a stalemate in the legislature that’s blocked action on fixing pothole-addled roadways. Voters’ ire was made clear in May, when lawmakers’ ballot plan to raise the state sales tax to pay for fixing roads was soundly thrashed by a 4-1 margin.

Michigan is one of 26 states, as well as Washington, D.C., that allow voters to propose laws via a petition drive. The petition campaigns have 180 days to gather signatures equal to eight percent of the votes cast in the most recent gubernatorial election. The legislature then has the option of adopting the initiative as a law (without the governor’s signature) or allowing the question to go the ballot.

That’s why it’s worth watching what happens with this move to raise the corporate tax rate. If it happens in Michigan, it could happen elsewhere — just like the actions against unions across the Midwest.

But there’s a danger in going to voters. Union leaders lost big in 2012, when they asked state voters to amend the Michigan Constitution and enshrine collective bargaining rights. In retaliation, a “lame duck” legislature passed the right to work law.

There’s fear of similar retribution should the corporate tax drive move ahead. “It’s getting into all-out war,” says Pat Devlin, a leader of the construction trades union. “Once you cross that line, it’s going to be a point of no return. I don’t think we’re there yet, but we’re getting close.”

For story ideas, see what unions and other groups in your state are trying to put on the ballot. How is your state dealing with crumbling roads? Are there other issues that are contentious between unions and corporations?

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