Road Reforms Are Critical to Michigan's Infrastructure

Governor Engler’s proposed "Build Michigan II" road program sets important strategic directions for fixing Michigan’s roads. While a potential gas tax increase captures the headlines, reforms the governor is also pushing for deserve at least as much attention.

It may be tempting to decry the deteriorating condition of Michigan roads and call for nothing more than an immediate and substantial tax increase. But as an April 1995 report from the Mackinac Center for Public Policy argued, that approach would amount to poor leadership and bad economics. The right approach, the report showed, is to offset any gas tax hike with other tax cuts and enact changes to squeeze more value out of the already substantial sums Michiganians pay for roads.

The most important elements in the governor’s program are the reorganization of road responsibilities and changes in contracting procedures. Among other things, the governor wants to convert some 23,000 miles of local roads to state control and adopt a new competitive bidding system for maintenance of all state roads. The legislature should make sure that several items related to reorganization, contract management, and accountability are part of the final program.

Reorganization. Michigan’s decades old experiment with independent state and county road commissions should be revised. While these commissions were set up to "take politics out of the roads," they have in many cases simply reduced accountability for the roads. The legislature should give the governor direct control over the Department of Transportation (MDOT) by eliminating the Transportation Commission, and should at least give elected county commissions the option of folding independent road commissions into general county government.

Most importantly, if the governor is to be responsible for road conditions, it is critical that he have direct control over roads carrying the bulk of commercial and personal travel. That means allowing MDOT to plan and manage construction and repairs on the 23,000 miles of roads the governor has proposed taking over. Currently, the state manages just 8.2 percent of our road miles, while the national average for state governments is 20.6 percent. State management will allow for economies of scale in planning, design, and acquisition of construction and repair services. It will also allow for whole stretches of road to be repaired at the same time—regardless of how many cities the road runs through.

Contract Management. Currently, MDOT does its own maintenance with state employees in 21 counties. MDOT contracts with the other 62 counties, and many cities, for maintenance of state roads in those jurisdictions. However, MDOT uses the same master contract with almost all counties, and simply reimburses each county at whatever wage level they pay locally. There is no negotiation of wage levels. Nor are there any written performance audits of how good a job counties have done for the state. That’s simply a reflection of the system put in place years ago, and it needs to be changed.

Under the governor’s proposal, MDOT is to obtain competitive bids from counties, cities and private contractors for state roads. This will require a complete culture change, and the development of new contracting and monitoring systems. The private sector will also have to take an interest in bidding on maintenance work, and will have to develop the capabilities to perform this work. The pressure from private and public bidding will help guarantee better roads. To assure implementation, the legislature should mandate a transition to eventual full competitive bidding and require MDOT to develop performance measures and to monitor contractor results. MDOT should also be required to meet a schedule to obtain public and private bids for maintenance in the 21 counties where it currently does its own work.

Accountability. The public needs to be assured that their tax money for roads will actually be spent on road work, with the highest priority going not to new expressways but to reconstruction and maintenance of existing infrastructure. A careful look should be taken at the amount of money being allocated for basic maintenance in the new state system. Proper accountability also means spending all the new revenues on roads-with no diversions to mass transit, Amtrak, or office construction and remodeling.

Full accountability also requires that local expenditures of Michigan Transportation Fund moneys be audited. MDOT has not had authority to audit uses of this money since a 1972 Supreme Court decision indicating there was no authority for such audits. As it turns out, the Michigan Department of Treasury has performance audit authority, and the governor should mandate that several counties around the state be audited this year and in the future.

Michigan’s roads are in need of repair, and the clock is ticking. But while some legislators seem quick to jump on the tax bandwagon, the citizens of the state ought to demand a lot more bang for whatever additional bucks they may be asked to fork over.