The Building Tradesman Newspaper

Friday, June 11, 2010

New study: Michigan businesses, roads, are on the road to ruin

By The Building Tradesman

LANSING –Michigan will lose 12,000 jobs and the chance to revive its economy if state lawmakers fail to pump new investment into the state’s deteriorating transportation system, says a study released May 26 by the Michigan Chamber of Commerce.

In contrast, doubling the state’s investment in roads and bridges could generate more than 15,000 good-paying jobs and pave the way for an economic turnaround, according to the Lansing-based Anderson Economic Group (AEG) analysis of the economic impact of several road funding models.

The study, “Michigan’s Roads: The cost of doing nothing and the rewards of bold action, marks the first time economists have systematically connected transportation funding with key Michigan industries that depend on it – manufacturing, agribusiness and travel and tourism.

“The results are clear and compelling,” said Patrick Anderson, principal and CEO of AEG who formerly served as Gov. John Engler’s deputy budget director. “Investing in our roads today would have a dramatic and positive economic impact for Michigan. The benefits would far outweigh any minimal cost increases to consumers through higher fuel levies, registration fees or other revenue sources that could be used to pay for needed road and bridge improvements.”

Where that road investment money would come from in the dysfunctional state government is a mystery. All seven candidates for governor – both Democrats and Republicans – said at last week’s Mackinac Policy Conference that they would not support a gas tax increase to improve the state’s roads

Money available to fix roads and bridges in the Michigan Transportation Fund has steadily declined in each of the last six years, due largely to more fuel-efficient vehicles and fewer new car purchases.

“Michigan’s economy will not fully recover without a first-class network of roads, bridges and transit systems – period,” said Rich Studley, President & CEO of the Michigan Chamber of Commerce, which commissioned the study. “The three industries that support Michigan’s economy – manufacturing, agribusiness and travel and tourism – are directly tied to the condition of our roads and bridges.”

The study also found that:

*For the first time, Michigan risks forfeiting $475 million in federal funds this year because it can’t come up with the $85 million in state money to leverage the federal money, setting a dangerous precedent for the state.

*The cost of highway congestion (both fuel costs and value of time wasted) was $2.9 billion in Michigan in 2007, or $287 per person.

*The cost of vehicle repairs due to crashes involving poor road infrastructure was $542 million in Michigan in 2006.

“The urgency is real – state lawmakers must act quickly to restore Michigan’s once-proud road system,” said Ken Sikkema, senior policy fellow at the Lansing-based Public Sector Consultants, and former Michigan Senate majority leader. “Every wasted moment means fewer jobs and dollars for Michigan, and more federal dollars for other states.”

The study found that urban roads in Michigan are in worse shape than those in neighboring Midwest states and below the national average. Last year a trucker survey rated Michigan’s roads the worst in the nation.