State and Local System Needs

Earlier analysis of the highway construction and maintenance requirements for the state system suggested a possible need for an additional $375 million of funding after elimination of non-highway items. However, the need for a tax increase can be eliminated or reduced by implementation of cost saving proposals that the state can control. Other measures can be taken, such as lobbying for an increased share of our own federally collected highway user taxes that could further reduce the size of any necessary increase in funding. However, these potential revenue gains and cost savings that the state cannot directly control are not considered in analyzing the amount of additional investment funding needed. Potential savings related to reductions in mass transit funding are also excluded from this analysis because of the difficulty of implementing such programs.

Table 6 shows the amount of net new annual revenue needed for the state and local system after deductions for potential savings. The originally stated MDOT need for $410 million per year has been reduced by $35 million to eliminate non-highway programs, and by $81.8 million to reflect additional annual cost savings, leaving a net new revenue need for the state system of $293.2 million. On the local system, the $281.8 million in justified need is reduced by $89.8 million in potential savings, leaving net revenue requirements of $192.0 million per year. Total state and local needs after cost savings are estimated at $485.2 million annually.