The Michigan highway system is at a turning point. Funding is declining at a time when the need for additional investment is increasing. The system can be revitalized with appropriate new investment and reforms, or it can be allowed to deteriorate to a point where it has a significantly negative impact on economic development and the quality of life in the state.
In order to build its economy, Michigan needs a road system that offers fast and reliable transportation for freight and people. Manufacturers are dependent on a well-maintained highway system in order to move freight "just-in-time" and allow for low inventory levels that result in lowest total distribution cost. Manufacturers and service businesses want to locate in areas where the specialists — technicians, consultants, sales people and the like — can interact easily, but also in areas where they can draw a workforce in from a wide commuting range and where employees’ families will want to live because of the quality of life afforded by easy mobility.
While good roads are critical to Michigan’s auto industry, they are perhaps even more important to some of the kinds of new industries that are critical to Michigan’s future. For instance, the aerotropolis air freight hub being discussed for Wayne and Willow Run airports will be highly dependent on a well-constructed, congestion-free road system that can move air freight between all the ground intermediaries involved in the air supply chain. Likewise, capitalizing on Michigan’s position at the center of the U.S.-Canada trade network and broader NAFTA trade area, is dependent on roads and border crossings that allow for reliable transportation of goods and business people. The same is true for companies like Google that won’t be happy about investing in a metropolitan Ann Arbor region that is in danger of being ensnarled by congestion on U.S. 23.
The state spends some $3.4 billion annually on Michigan’s state and local roads, but there are many indications that additional funding is necessary. One key indicator is the fact that current taxes will not support current road spending — in fact, spending in the current five-year plan is scheduled to decline from $1.62 billion in 2007 to $1.23 billion in 2011. Even that spending plan looks like it may fall short by $300 million and may face future cuts. In addition, the five-year plan calls for "expansion" spending on new interchanges and lanes to decline from $310 million to just an average of $36 million between 2009-2011. Expansion spending is critical to fighting congestion.
There are many other indicators of need. The Michigan Department of Transportation, for example, has identified backlogs in construction needed to maintain state-owned road and bridge conditions, and to fight congestion. This study estimates that these backlogs have a cost of at least $800 million per year. There are additional county and city road needs over and above that amount.
Absent new spending, MDOT forecasts that the surface and more important sub-surface life and condition of our state-owned roads will deteriorate from 92 percent "good" to 68 percent by 2014. Looking solely at surface conditions — not the underlying quality of the road structure — 13 percent of Michigan’s urban interstates are in poor condition, while neighboring states averaged just 6.5 percent in that category. Michigan also ranks far worse than neighboring states on "urban other principal arterials."
Michigan does not fare any better in terms of congestion levels. For instance, Michigan’s urban non-interstates are 29.6 percent congested, while Midwestern states overall averaged 19.4 percent congested. Michigan’s urban interstates are also somewhat more congested than those in neighboring states. So what should be a distinct economic development advantage given our slow population growth relative to these states, is in fact no advantage at all.
A number of other measures indicate that Michigan must invest more in its highway system. Road usage has increased by far greater percentages than actual lane mile additions over the last 30 years. Fuel prices and the auto fleet’s increasing fuel economy have had a major impact on the amount of fuel sold and, consequently, the amount of tax collected, since fuel taxes are per gallon and not tied to the fuel price. Inflation has also taken a toll on available road money with Michigan’s gasoline tax losing 42 percent of its purchasing power since gasoline taxes were last raised in 1997.