Source: MDOT 2007-2011 Five Year Plan
Michigan’s road network is at a turning point. It can be allowed
to deteriorate or it can be revitalized with new reforms. As long as the state
stays in the road business, it must make roads a higher priority.
In 2004, Michigan state and local governments spent about $3.4
billion on road construction and repair. However, money available for new
construction and maintenance is decreasing at the very time the need for
investment is increasing. Michigan’s transportation funding shortfall is
hundreds of millions of dollars per year for state, county and city roads. A
well-maintained transportation network contributes more to the quality of life
than many other state spending programs, including those often touted as
promoting "economic development."
The best option for finding new road money is for the Legislature and governor to get serious about spending a lot less on things in state government that are far less important.
One can look at Michigan’s road needs in terms of traffic
trends, road conditions, congestion and auto damage costs. Vehicle miles
traveled increased 58 percent between 1980 and 2000, while lane miles increased
just 3 percent. Interstate travel is forecast to increase another 40 percent by
2026. Truck tonnage is forecast to grow by at least 70 percent by 2020. With
traffic growth, road conditions will deteriorate. The portion of pavement in
"good" condition is forecast to drop from 92 percent now to 68 percent by 2014.
The congestion picture is no brighter. The Michigan Department
of Transportation estimates that 15 percent of urban freeway vehicle miles
traveled are congested. Absent new funding, this number is expected to reach 43
percent by 2030. Congestion and auto damage from potholes costs the average
Michigan motorist more than $318 per year, a figure likely to grow.
Fuel tax revenues have been flat, pegged to 19 cents per gallon
regardless of the price of gasoline, and high prices have reduced consumption.
Because of extensive bonding to augment tax revenue in recent years, debt
service is climbing rapidly as construction costs soar. Asphalt costs nationally rose 43 percent between 2003 and 2006, and concrete costs rose 34 percent. As a result, Michigan’s inflation-adjusted road dollars per million miles of travel
dropped 53 percent since 1960.
The needs are especially clear to drivers in congested areas of
southeast Michigan and the communities around Grand Rapids. However, more taxes
with "business as usual" spending are not good enough. We need a smarter
strategy for raising and spending the funds.
Michigan’s transportation infrastructure requires at least an
additional $460 million annually. Legislators have a smorgasbord of options for
stitching together a package that would meet those needs. They could start by
scrapping the gimmicky 21st Century Jobs fund and put the money toward a real
economic development program — good roads.
They could also consider raising gasoline and diesel taxes to
come up with more, though that solution should be offset with tax and spending
cuts elsewhere in state government to avoid further damage to our already
fragile economy. Michigan gasoline and diesel taxes together cost the average
driver $107 in 2003, ranking us 42nd as a percentage of personal income. As of
late 2005, our 19-cent-per-gallon gasoline tax ranked 31st nationally. Our
diesel tax on motor carriers, at 15 cents per gallon, ranked us 45th among all
states. So higher gas taxes, especially if they are sunsetted, are one option
that wouldn’t put Michigan out of line with other states. Another option is to
dedicate up to 2 points of the 6-percent sales tax on gasoline to roads.
Additional road money could also flow from introducing automated
express toll lanes for southeast Michigan; implementing impact fees on those
benefiting most from new roads; changing current practices that drain money from
the Michigan Transportation Fund; and enacting common-sense efficiency reforms
like repealing prevailing wage requirements, consolidating the multiplicity of
road agencies, and privatizing more maintenance functions through competitive
contracting. Whatever money is raised should be targeted to key high priority
state, county and city roads that are critical to economic development and
The best option for finding new road money is for the
Legislature and governor to get serious about spending a lot less on things in
state government that are far less important.
In light of Michigan’s economic plight, meeting critical
transportation needs must be a higher priority for state government. Uncommon
leadership is required to accomplish this without raising the overall tax
burden. Lansing can change its spending priorities, fix the roads and improve
our business climate all at the same time.
Dr. John C. Taylor is a senior policy analyst with the Mackinac
Center for Public Policy in Midland, Mich., an associate professor of marketing
and logistics at Grand Valley State University and author of the Center’s
forthcoming study on the Michigan transportation system.
Permission to reprint in whole or in part is
hereby granted, provided that the author and the Center are properly cited.