Michigan Gov. Whitmer vetoes broadband bill, citing cost and quality concerns
(The Center Square) – Michigan Gov. Gretchen Whitmer on Wednesday vetoed a bill that would have given internet companies tax breaks if they provided broadband access to rural, underserved areas, saying the measure was too costly for slow service.
HB 4210, tie-barred to SB 46, would have allowed companies to exempt personal property taxes on eligible broadband equipment if they received funding from certain government agencies.
The bill would have reduced property tax revenue by an unknown amount, the nonpartisan Senate Fiscal Agency said.
For the last year in many rural areas, frustration mounted as thousands of families leaned on unreliable or no internet services for kids’ school and parents’ now-remote careers and education. In 2018 the state found that about 368,000 rural Michiganders lacked access to broadband.
Internet service providers have invested heavily in infrastructure in urban areas — where the cost per customer is less — but have skipped over most of rural America where costs are higher per customer.
Whitmer said in her veto letter that the bill doesn’t require a high enough internet speed and would cost too much taxpayer money via the School Aid Fund.
“I am grateful to have legislators with me in this fight, working to expand access to broadband,” Whitmer wrote. “Unfortunately, this bill falls short: It would cost schools millions without spurring high-speed broadband development. In fact, the bill’s target of 25 mbps service would deliver a mere fraction of the speeds well in excess of 100 mbps that U.S. broadband users have come to expect. If Michiganders are going to spend their hard-earned tax dollars to incentivize broadband development, it better be fast.”
Rep. Beth Griffin, R-Mattawan, said the veto disproportionately hurt rural Michigan families by denying broadband internet in underserved areas.
“The governor stresses the importance of increasing access to broadband, but when it came time to actually do something about it, she failed to help people in our rural communities,” Griffin said in a statement. “People need high-speed internet in all areas of the state – not just big cities and booming suburbs – and the COVID pandemic has dramatically accelerated this need. With this veto, the governor is hurting people in underserved areas of the state – patients who can’t get to a doctor and need telehealth options, kids who are relying more and more on online learning, and workers forced to do their jobs from home. These Michigan families face a connectivity crisis, and the governor refused to help them at a time they needed it most.”
While people living in urban areas can usually get fast and reasonably priced internet service, people in rural areas typically have slow internet access at higher prices. Most rural internet options restrict data, complicating many typical internet activities such as Zoom conferencing or online schooling. Some areas have no internet access at all.
The SFA warned of language in SB 46 could drastically impact revenue loss because “lack of broadband service” isn’t defined. Broadband service can be delivered via satellite, fiber-optic cable, DSL, and more, so it’s unclear what areas lack all broadband or just one form of service.
The vetoed bill has been re-referred to the Senate’s Committee on Communications and Technology.
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