Lansing — The Saginaw County businessman who spent $3.5 million of his own fortune last year in a failed bid for Congress has launched a new campaign opposing the proposed sales tax increase that Gov. Rick Snyder is championing to boost road funding.

Paul Mitchell, a Republican from Thomas Township, formed a ballot campaign committee on Friday dubbed the “Coalition Against Higher Taxes and Special Interest Deals.” He plans to advocate a “no” vote against Proposal 1 that’s on the May 5 ballot.

The ballot proposal would increase Michigan’s 6 percent sales tax to 7 percent as part of a complex plan to raise $1.2 billion more annually for roads. But the plan, hatched by Snyder and lawmakers last month, also earmarks $300 million for schools, $260 million for tax credits for the working poor and $95 million for municipal revenue sharing.

Mitchell said it’s the “grab bag” spending on items unrelated to road repairs that Snyder and Republican legislative leaders tacked on to get Democratic votes that motivates him to spend some of his own money trying to defeat the initiative.

“In order to repair our roads, we have to pay a $700 million toll to special interests — and that just astonishes me,” Mitchell said in an exclusive interview with The Detroit News. “I think it speaks for politics as usual. Special-interest lobbyists held our roads hostage and they got a $700 million toll.”

Snyder spent two years trying to get the Legislature to increase fuel and vehicle registration taxes to raise at least $1.2 billion more annually, the amount experts say is needed to keep the state’s roads and bridges in fair condition.

But the GOP-controlled House and Senate couldn’t agree on how to raise the money or how much was needed, so they cobbled together a bipartisan plan to put the issue up for a statewide vote May 5, when mostly school board and municipal elections are on the ballot.

Snyder has said the ballot proposal is not ideal, but says there are few alternatives for more road funding given the state’s current budget constraints and a more conservative Legislature this year that’s even less open to higher taxes than the last one.

“This is our best opportunity to get something done,” Snyder told reporters last week.

Mitchell has a response to the governor: “If this is the only choice voters have, it’s a pretty poor choice,” he said.

Mitchell, 58, lost an open Republican congressional primary against then-Sen. John Moolenaar last August in mid-Michigan’s 4th Congressional District.

The former CEO and co-owner of the Ross Medical Education Center in Saginaw spent $3.5 million of his own money on a barrage of TV ads attacking Moolenaar, who went on to win the seat vacated by former U.S. Rep. Dave Camp.

Mitchell formed his ballot committee just days after a new group of political consultants took over managing the “yes” campaign ballot committee — Michigan Citizens for Better Roads and Schools — at the behest of Snyder’s office.

“This ballot question is the one chance we will have to guarantee funding in our Michigan constitution for safer roads, funding that can’t be diverted to any other purpose, and we are disappointed in any opposition to safer roads and bridges,” said Roger Martin, spokesman for Michigan Citizens for Better Roads and Schools.

Mitchell would not say how much he’ll personally spend on the “no” campaign against Proposal 1, only that his group will use TV, cable, radio and print advertising to try to defeat the tax increase. The first deadline for disclosing initial fundraising reports with the state Bureau of Elections is Feb. 17.

“I don’t think we have to spend what people are estimating the pro forces have to spend,” Mitchell said. “They have a bigger hill to climb.”

Mitchell, a former Michigan Republican Party fundraiser, also is chairman of the Faith & Freedom Coalition of Michigan and he plans to use that nonprofit group for “educating” voters about the ballot proposal.

Under federal law governing nonprofit groups, the Faith & Freedom Coalition cannot expressly advocate a “no” vote.

Mitchell’s ballot campaign committee is the second to emerge against Proposal 1. Hours after the Legislature placed the issue on the ballot Dec. 19, a group called Protect MI Taxpayers was formed with the state Bureau of Elections.

The conservative political group Americans for Prosperity also plans to do voter education on the sales tax increase, “if not outright advocacy against it,” state director Scott Hagerstrom said.

The group’s grassroots volunteers will begin distributing 100,000 pieces of literature this week, Hagerstrom said.

“Activists have already started making phone calls,” Hagerstrom said. “You almost don’t have to tell people to vote no — you just have to tell people what it is and they lean no.”