Aggressive reforms in the organizational structure and methods of securing highway infrastructure construction and repair could generate substantial savings that would help to reduce the size of any tax increase.
As part of any possible tax proposal, the Governor should form a Michigan Commission on
Highway Infrastructure Reform to study and report on ways to reinvent the roadbuilding and
maintenance system. Just as with welfare reform, we need to re-examine the entire
system, and consider fundamental changes. Possible changes that a Commission should
consider include reforms in the organization and operations of state, county and city road
operations, and the interface between these entities. The role of county road commissions
as independent entities should be specifically considered. Such a review makes good sense
given the $691.5 million in Michigan Transportation Fund monies that will be turned over
to local governments this year with little oversight or knowledge about how well the money
is being spent.
The proposed commission should also investigate the way other states operate at the
local level, the productivity of existing operations relative to other states, the
potential for savings, and possible state incentives to eliminate duplication and improve
productivity and efficiency. The Commission should also examine opportunities to eliminate
duplication between state and county operations and potential savings from consolidations
or increased contracting relationships, and the potential to increase the privatization of
state, county and city highway operations.
Aggressive reforms in the organizational structure and methods of securing highway
infrastructure construction and repair could generate substantial savings that would help
to reduce the size of any tax increase. In 1992 counties and local governments spent
$920.0 million on road work, with most of the money coming from federal and state user
taxes. A reinvention of how government and the private sector function in the roadbuilding
and maintenance business can save at a bare minimum 10% of the current maintenance costs.
This would lead to savings of $64.3 million per year, or 1.4 cents per gallon of gas tax
which could be used for needed local government investment increases. In addition, the
author believes that the above reorganization and privatization ideas can save money on
the state trunkline system. Even if a 10% savings were limited to additional privatization
of the $138.8 million in state trunkline maintenance activities, a total of $13.8 million
per year would be saved, or .3 cents per gallon.