The Building Tradesman Newspaper

Friday, June 06, 2014

Road to recovery? Michigan goes from zero to $1.7 billion in proposed construction

By The Building Tradesman

LANSING – Half a billion… $1.3 billion… do we hear $1.7 billion?

So far, we have only heard talk, but it sounds as if the Michigan Legislature is finally starting to get serious about fixing Michigan’s woeful roads.

This year state Republican lawmakers have morphed from exhibiting zero interest in providing more money for road and bridge repairs, to allocating about $450 million, to now possibly coming up with just about all of what the Michigan Department of Transportation has requested to get the bulk of the state’s roads and bridges back into good condition.

“We’re feeling pretty confident that all this political horse-trading is leading to some kind of positive outcome for our industry,” said Mike Nystrom, executive vice president of the Michigan Infrastructure Trades Association (MITA). “We have had a seismic shift this year in public opinion about the state’s roads, with a high level of frustration. I think our elected officials want to be able to go home this summer and tell their constituents that they’re getting something done.”

Until last month, there had been little serious talk about new revenue for roads. On May 12, the state House had adopted a package that moved $370 million in future General Fund dollars to the roads, and changed the state’s flat gas tax to a percentage based tax and hiked fines on overweight trucks to raise another $80 million or so.

Now Republican lawmakers in the Senate – perhaps spurred by Michigan’s worst-ever Pothole Spring – are upping the ante on road funding. According to MIRS News Service, Senate Majority Leader Randy Richardville said the new road funding package could raise up to $1.5 billion per year, while the Senate Fiscal Agency estimates $1.6 billion and MITA says the plan could produce a windfall of $1.7 billion per year. The variable in the estimates is mostly over the fluctuating price of petroleum.

The bulk of the additional funds would come from imposing a new 9.5 percent wholesale gasoline and diesel fuel tax, and then increasing that to 15.5 percent by 2018. The proposal would reportedly raise the price of a gallon of gas more than 25 cents over the next four years.

That new wholesale tax would replace the existing19-cent-per-gallon tax on regular unleaded fuel and the 15-cent-per-gallon tax on diesel fuel.

Two polls released last month hammered home how the state’s voters feel about Michigan’s decrepit roads. An EPIC/MRA poll conducted May 17-20 of 600 registered voters found that “improving the condition of roads and bridges” was mentioned as the top concern for 29 percent of voters. In second place was “improving the state economy and creating more jobs.”

Another poll by Market Research Group (MRG) found that concern over  the condition of the state’s roads is second only to concerns about jobs and the economy.

“Eighty-two percent of Michigan voters think the current condition of roads and bridges is bad,” said MRG President Tom Shields, who conducted the poll. “A vast majority of voters believe Michigan is not spending enough to maintain our roads, and there is solid support for spending an additional $1.8 billion per year on road funding.”

Nystrom said if additional money is approved – whatever amount – not all of it will be shovel ready. But MDOT has a rolling five-year plan for planning work, and some of the funds could be moved forward, putting tradespeople to work more quickly.

“There are estimates that every $1 billion in road work creates or maintains 15,000 to 20,000 jobs,” Nystrom said. “That’s a significant positive. And our contractors stand ready to do the work.”