Revenue increases must be tied to policy changes and offsets, according to study’s author
For Immediate Release
Monday, April 16, 2007
Contact: John C. Taylor, Ph.D.,
Senior Policy Analyst
"Hot lanes," consolidations, warranties among numerous recommendations
MIDLAND — Without critical funding reforms, the condition of state, county and local roads in Michigan will deteriorate significantly over the next decade, while congestion will reach levels that will harm economic development prospects, according to a new road study released today by the Mackinac Center for Public Policy.
"Mobility is critical to our economic prosperity and quality of life," said John C. Taylor, Ph.D., author of "Road Funding: Time for a Change." "But under the current system, the state cannot maintain a network of efficient and reliable roads."
Taylor, a senior policy analyst with the Mackinac Center and an associate professor of marketing and logistics at Grand Valley State University, estimated that Michigan’s transportation infrastructure will require at least an additional $1 billion annually, funded by state and local government road taxes, automated toll lanes and cost saving reforms. In order to cover part of the funding, Taylor recommended increasing the gas tax from 19 cents per gallon to 25 cents per gallon and the diesel tax from 15 cents per gallon to 25 cents per gallon, but only if the increases were tie-barred to reforms and offset elsewhere in the state budget. The increases would be phased in over three years and would sunset after six years.
While extra revenues are needed, according to Taylor, "much of the new state funding should be steered to a ‘high priority economic development network’ of selected state, county and city roads to be identified by road officials. In addition, savings can be achieved by consolidating the number of road agencies involved in Michigan road building and maintenance, eliminating prevailing wage laws, closing loopholes in registration fee collections and adopting other common-sense measures."
Pavement with remaining service life in good condition is expected to drop from 92 percent this year to 68 percent in 2014. Annual revenue dedicated to roads is projected to decline from $1.6 billion in 2007 to $1.2 billion in 2011. To overcome these challenges, the study recommends three major categories of reforms and incentive programs that should be tie-barred to any funding increases.
"The state needs to spend more on its roads, but one thing Michigan does not need is an overall tax increase," Taylor stated. "These increases will allow Michigan to provide a road system necessary for commerce and will bring us to parity with neighboring states, but without accompanying offsets they would merely exacerbate Michigan’s economic woes."
The 93-page Mackinac Center report is available at www.mackinac.org/8374.