LANSING – The subject: A synopsis of the state of the state’s finances to fund road and bridge repairs and maintenance.
The source: Michigan Department of Transportation Director Kirk Steudle.
The problem, according to Steudle: “We’ve been under-funding transportation for years.”
The prognosis, according to Steudle: “We’re going on a downward path, very fast.”
Steudle last month made those and other comments to delegates at the Michigan Building and Construction Trades Council’s Legislative Conference. No one who heard his presentation could possibly come away with the impression that Michigan is on the right track to funding road and bridge work in the foreseeable future.
“It doesn’t take a genius to figure out that we’re headed for a disaster,” said Steudle. “Anyone who says we don’t have a problem isn’t looking at the facts.”
MDOT currently spends about $1.4 billion a year on funding repairs and improvements to about 120,000 miles of road in Michigan. That spending level currently gets us 80-90 percent “fair” to “good” grades for our state’s roads. But that’s as good as it’s going to get without more money.
Last fall, Gov. Rick Snyder proposed a plan that could as much as double state road revenues by hiking registration fees and shifting the state’s 19-cents-per-gallon tax on gasoline with a tax on wholesale fuel, which would yield more money for the state.
“The challenge is simple,” Snyder said when he released his plan. “Michigan’s infrastructure is deteriorating from a lack of investment. If we are going to reinvent Michigan’s economy, we have to reinvest in Michigan’s infrastructure. For the first time ever transportation revenues are declining. Simply put, better fuel economy and higher gas prices lead to lower road revenues from the fixed fuel tax. All the while, the cost of materials and labor continue to rise, seriously undermining our ability to keep up.”
Two separate studies by state lawmakers in recent years, as well as a report by the bipartisan Transportation Funding Task Force – have also called for more funding. A study released last year by a Republican and Democratic lawmaker figured that the state would need to spend an additional $1.4 billion per year from 2012 through 2015, then nearly double that amount to $2.6 billion per year by 2023, in order to maintain a level of roads in “fair” condition. They said an additional $3 billion per year would need to be spent in order to achieve a “good” standard for roads.
State Republicans, who control all levers of power in state government, have only recently taken action on providing more money for roads. On March 27, the Michigan Senate approved a bill that would raise revenue for road repairs by more than $100 million per year, taking money from the state’s general fund. The bill is now in the state House.
While $100 million isn’t chicken feed, the real money that’s needed for the state’s road will have to come from more revenues. But the GOP is a political party that campaigns on not raising taxes – and there’s a potential whopper of a tax hike on the way if they simply decided to raise gasoline taxes in order to retain the current level of “fair” to “good” roads. Motorists would then be paying in the neighborhood of an additional 20 cents per gallon of gas.
“There are a lot of lawmakers who say we don’t need $1.4 billion, that we just need a couple million” Steudle said. “I say ‘show me the facts.’ ” He warned that waiting until 2014 to hike transportation spending to a level of $2 billion would actually require the spending of $8 billion, given further deterioration of roads and the higher costs of labor and materials.
Steudle’s summary: “pay now or pay later,” he told the building trades. “As it is we’re holding things together with duct tape and baling wire.”