SOUTHFIELD – Gov. Rick Snyder’s long-awaited plan to improve road, bridge and infrastructure funding in Michigan would inject an additional $1 billion per year into the construction industry.
Snyder released his plan on Oct. 26 at Lawrence Technological University. The extra $1 billion a year in funding would come from higher vehicle registration fees – charging motorists $120 more a year for each vehicle they register.
In addition, the governor would drop the current 19-cents-per-gallon tax on gasoline and 15-cents-per-gallon diesel fuel tax and replace it with a more stable 6.7 percent tax on the wholesale price of fuel. Taxing gasoline usage has resulted in funding declines in recent years, and the effects are obvious in the form of bigger potholes and crumbling bridges. And, the governor said he would like to help local governments increase the money they can spend on their own streets and bridges, by letting them go to the voters and ask for $40 per vehicle toward regional road maintenance.
“The challenge is simple,” Snyder said. “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.”
Release of the governor’s plan comes a month after a House Republican report concluded Michigan needs to spend an additional $1.4 billion per year on road work to maintain an overall “fair” system of roads. The Republican report confirmed a 2008 study by the bipartisan Transportation Funding Task Force, which included union representation, which called for the state to spend an additional $3 billion per year to achieve a long-term “good” standard for state roads.
Even at the reduced funding sought by the governor, Michigan Infrastructure and Transportation Association Executive Vice President Mike Nystrom, declared “we are very pleased by Gov. Snyder’s call for immediate action to provide long term solutions to fix Michigan’s crumbling roads and dangerous bridges. Citizens have repeatedly called on the state’s policymakers to repair our ailing infrastructure. Fixing our roads, bridges, water and sewer lines will create jobs, keep our citizens safe, preserve our environment and help Michigan businesses export their products around the globe.
“Gov. Snyder realizes that a delay in fixing our infrastructure ends up costing taxpayers more in the long run. We hope the House and Senate will follow the governor’s bold leadership, and we look forward to working with the governor and Legislature to pass this long-awaited, long-term funding solution.”
Indeed, getting the Republican-led House and Senate to follow the governor’s plan will be the only hurdle to getting the funding released – but it’s a huge one. It’s unclear how the GOP and those who subscribe to the “no new taxes” ideology will react or bend to the obvious need for more road funding.
Michigan Building and Construction Trades Council Secretary-Treasurer Patrick Devlin said he wouldn’t be surprised if Republican lawmakers use a transportation funding increase as an excuse to chase after phantom cost savings – such as renewing their push to eliminate the state Prevailing Wage Act.
“After what Republicans have done to working people this year, it’s not hard to figure out where they’ll try to go from here,” Devlin said. “I expect they’re thinking, no sense letting a good opportunity go to waste, let’s trade a revenue hike with making another attack on unions in this state.”