The Building Tradesman Newspaper

Friday, April 19, 2013

Permanent funding stalled for state road, bridge repairs

By The Building Tradesman

(By Marty Mulcahy, Managing Editor)

LANSING – Decades have passed since it became apparent that Michigan needs a sustainable, long-term funding plan to repair and maintain the state’s roads and bridges.

Finding the political will to impose some sort of tax or new revenue source to get the work done has for years, been a bipartisan failure. Even with single-party Republican rule and Gov. Snyder pushing for new money to be raised, nothing has changed. And now, Michigan is moving past a tipping point where it’s going to cost exponentially more to make repairs with further delay.

“The continuous disinvestment in transportation has reached a cliff,” said state Department of Transportation Chief Operations Officer Greg Johnson to the Michigan Building and Construction Trades Council’s Legislative Conference last month. “MDOT has been waving the flag vigorously over the past five years that we’re under-funded, and that we’re not investing enough in our infrastructure.”

Michigan will spend about $1.7 billion on road work this year. Snyder has proposed spending an additional $1.2 billion per year for the next decade in an effort to get our wheels rolling on better roads.

According to MDOT, currently 32 percent of Michigan’s roads are ranked in poor condition. They estimate that by 2018 this number will jump to over 65 percent at current funding levels. Bringing a road from poor to good pavement condition costs six times more than it does to bring a road from fair to good condition.

Michigan’s road funding scheme is primarily based on a gasoline tax of 19 cents per gallon, which hasn’t been raised since 1997 and isn’t set up to be adjusted for inflation. Nearly everyone agrees that simply raising the fuel tax is a non-starter, because vehicles are becoming more fuel efficient and the tax depends on people driving the same miles or more in order to maintain past funding levels.

Snyder, in his State of the State address this year, proposed a wholesale tax on gasoline at the rate of 33 cents per gallon, which could be floated higher. He also proposed hiking registration fees by 60 percent on cars and 25 percent on heavier trucks and trailers. The taxes and fees would cost the average Michigan family about $120 per year, per vehicle.

“Investing money in our roads and bridges today saves money in the long run,” Snyder said. “It also builds the foundation for our 21st century economy. We know what needs to be done. Let’s fix our roads.” Snyder’s original plan is no longer on the table, with members of his own caucus complaining about the tax and fee hikes. He acknowledged April 9 that the Legislature has no viable substitute funding plan in place, and is only at the point where it “recognizes the problem.”

Even with the state’s roads turning into an expensive crisis point, getting any fee or tax increase past the conservatives in the Michigan House and Senate is going to be difficult, as acknowledged by Senate Majority Leader Randy Richardville (R-Monroe).

“I think I’m going to have a lot of trouble – and I think a lot of members of the legislature will have problems – supporting the governor’s proposal as far as an increase of gas taxes at the pump,” Richardville said. “I think we’ll have a real problem with the registration fees too.”

It may take weeks of wrangling before a new funding system can be found – if at all.

“No legislator is interested in taking bullets on supporting anything that sniffs of a tax hike unless it has realistic shot of passing,” said MIRS NewsService on April 9. “So until all four caucus leaders sign off on something together, getting anything other than more vague concepts from a substantial number of legislators will be hard….”

If Democratic votes are going to necessary to pass a road funding hike – and it looks like that will be the case – one major piece of good news for the building trades is that all signs point to Dems insisting on sustaining the state’s prevailing wage law as a bargaining chip.

One Republican lawmaker maintains that the state needs to look at other ways to raise the money. “We’ve got to stop leading with taxes and start leading with innovation,” said state Sen Patrick Colbeck (R-Canton) who proposed selling naming rights on public assets and selling ads on bridges.

An alternative option Republican lawmakers have raised is a two percent hike in the state sales tax, while eliminating the gas tax. That would require a two-thirds majority in both the state House and Senate, and approval from voters in the next statewide election.

The process of finding more road funding got off to a rocky start last month. A House subcommittee on March 20 approved a new transportation budget that actually cuts funding by $25.5 million. That line item on the budget will likely change in the next few weeks – but it highlights the difficult of talking about raising revenues.

“The status quo is no longer acceptable when it comes to funding for our roads and bridges,” said Mike Nystrom, executive vice president of the Michigan Infrastructure and Transportation Association. “Although we recognize no solid agreement has come together, this budget continues us in the wrong direction by actually decreasing the investment made in our transportation system.”