Michigan Transportation Funding

Figure 1 breaks out total transportation spending by category. In 1992, $2,468.6 million was spent by all levels of government on all forms of transportation.2 Of this total, $2,093.7 was spent on highways or highway related administration, and $374.9 million was spent on non-highway purposes. The non-highway spending, some 15.2% of the total, was primarily for mass transit purposes.

Of the $2,093.7 million for highway related purposes, just $1,605.6 million was actually spent on highway construction and maintenance. The remaining $488.1 million was spent on administration, law enforcement and safety, and interest and bond retirements. Bond principal and interest payments included in the above figure total $80.6 million. For actual highway construction and maintenance, $920.0 million of the total was spent on locally administered roads, and $685.6 million was spent on state administered roads. Capital outlay expenditures accounted for $823.6 million of the total highway spending, while maintenance accounted for $782 million of the total. On the local system, 69.9% was spent on maintenance (generally including resurfacing), and 30.1% was spent on capital outlay for new construction. On the state system, 79.8% was spent on capital outlay (including resurfacing), and 20.2% was spent on general maintenance such as mowing and snow plowing.

Figure 2 shows the revenue sources for highway spending by all levels of government in 1992, and for related administration, collection expenses and safety enforcement. Receipts for highway related purposes totaled $2,282.9 million in 1992.3 All units of Michigan government received $1,056.1 million from state fuel and registration fees (after collection expenses), $374.0 million from the federal user fees, and $336.9 million from local governments. Additional revenue came from $270.2 million in bond proceeds, and $245.8 million in miscellaneous income (land sales and rentals, various fees, etc.).

For the non-highway spending of $374.9 million, 95.0%, or $356.5 million, was spent for bus capital and operating expense purposes.4 Bus operating expenses accounted for the vast majority of that total, at $328.7 million. Figure 3 shows the source of funds for bus capital and operations spending. Local government dollars accounted for 36.2% of the bus funding, state dollars represented 31.3% of the total, federal dollars were 16.2% of the total, while fareboxes provided just 16.3 % of the funding. The bulk of the state and federal funding goes to Southeast Michigan bus systems. For instance, in 1992 state and federal expenditures on bus systems statewide totaled $141.7 million, with SMART and DDOT receiving approximately $100 million of the total.