The Building Tradesman Newspaper

Friday, March 20, 2015

Run the numbers and without Proposal 1 it's 'back to Square One' for Michigan roads

By Marty Mulcahy, Editor

LANSING - Passage of a one-cent sales tax increase would permanently render $1.2 billion more every year for road and bridge repairs in Michigan. Those are the basic numbers involving Proposal 1, which will appear on the May 5 statewide special election ballot. But they only touch the surface.

For the Michigan Building and Construction Trades Council, the bigger number is 14,000 - the number of permanent construction jobs that will be created every year if Proposal 1 passes. Plus, desperately needed improvements will come to the state's 10,000 miles of trunkline roads, 90,000 miles of county roads, and just over 20,000 miles of city and village streets.

Michigan Department of Transportation Director Kirk Steudle brought all manner of other facts and figures March 10 to delegates of the 56th Legislative Conference of the Michigan Building and Construction Trades Council. But the overriding issue, he said, is that the state's roads are in horrible condition, and are getting worse because the state has neglected adding road repair revenues for so long. The last time Michigan hiked the state's gas tax was in 1998. "There are a lot of repairs that we're doing just to hold things together, because we can't make the proper repair," Steudle said. "We can't afford it."

The current road funding plan, Steudle said, "is a complex issue involving tax policy for the past 30 years." Fortunately, he said, "the ballot proposal is fairly simple."

Well, simple is in the eye of the beholder. The 100-word proposal on the May 5 ballot will succinctly explain the ballot issue, but there is a lot more to the proposal than just the sales tax increase and associated road work. Passage of the ballot issue would:

               *Increase the state sales tax from 6 to 7 cents.

               *Eliminate sales/use taxes on gasoline/diesel fuel for vehicles on public roads.

               *Increase the portion of use tax dedicated to School Aid Fund (SAF).

               *Expand use of SAF to community colleges and career / technical education, and prohibit use for 4-year colleges / universities.

               *Increase gasoline / diesel fuel tax and adjust annually for inflation, increase vehicle registration fees, and dedicate revenue for roads and other transportation purposes.

               *Expand competitive bidding and warranties for road projects.

               *Increase the earned income tax credit.

Joining Steudle in explaining the road funding issue to building trades delegates was Roger Martin of Safe Roads Yes, the leading advocacy group for Proposal 1. To underscore the potential difficulty involved in selling Proposal 1, he described a community meeting he led the night before in rural Jackson County. He said the audience, from a highly conservative area, "asked hostile, aggressive questions," about Proposal 1, but still only voted it down by a close 41-38 margin in a straw poll.

"If we can get that vote from a conservative area, we will be OK" in getting Proposal 1 passed statewide, he said. "What gets people to 'yes' is the safety message. That, and the guarantees" that the work will be done properly, with a warranty, by road contractors.

Martin said effective messages in promoting Proposal 1 include statements from sheriffs associations and EMS personnel, who can't quite rush at full speed to emergency scenes without fear of disabling their vehicles by running over potholes. And to illustrate the cascading list of problems caused by a lack of funding, Martin said that MDOT is now using more wire mesh instead of plywood to catch falling concrete under crumbling overpasses because inspectors can't see past the plywood to spot further damage.

Steudle pointed out that recent media reports about MDOT not enforcing road work warranties. He said Michigan leads the nation in using warranties on road work, and an audit found that 97 percent of the time the state gets full value from the work that's done. "All the hubub was about 3 percent of the work," he said.

Martin also addressed recent reports that the state Legislature does in fact have a backup plan to fund roads if Proposal 1 doesn't pass. He said any plan is likely to take money from the School Aid Fund, and lawmakers are likely to target repeal of the state's prevailing wage law as an alleged way to save money. He said the die-hard conservatives that run Lansing aren't going to have a tax increase on their record.        "This legislative group won't be raising taxes," Martin said. "If they agree to a plan, the money for roads is going to come from somewhere else in the budget."

Said Steduel: "All the road improvements are tied to the Proposal 1 referendum. If it doesn't pass we're back to Square One."