Opinion | Everyone – not just drivers – should pay for Michigan roads

John Hanieski is the retired chief economist for the Michigan Department of Commerce

The debate about how to finance the restoration of good roads and safe bridges has gone on for an interminable time. The problem seems to be captured by former U.S. Senator Bob Dole’s rule of public financing. “Don’t tax you; don’t tax me; tax that guy behind the tree.”

The public discourse seemingly has focused on finding a third party to bail Michigan out of a serious problem that is widely agreed upon. This proposal recognizes that infrastructure rehabilitation is a problem that belongs to all of us. A broad-based surtax with a low rate may be the least unpalatable solution.

Former Governor Rick Snyder’s 21st Century Infrastructure Commission issued a finding that the state needed to spend an extra $2.6 billion per year to maintain current roads and bridges.

The Michigan Consensus Policy Project (Ken Sikkema, Bob Emerson, Paul Hillegonds, John Cherry), in response to that finding, recommends raising the fuel tax by five cents per year for nine years, predicting it would raise nearly $2.5 billion. The underlying rationale seems to be that users should pay for road restoration.

There are problems with this assumption. The principle of user fees is defensible but too narrow in its conception of users. Users of the roads and bridges are not exclusively drivers. If one uses public transportation, if one uses non-motorized transportation, if one uses toiletries, food and expects an ambulance to arrive when needed, one is dependent upon our infrastructure and, hence, is a user.  

The difficulty with depending on a fuel tax surcharge is the revolution in personal transportation vehicles. Hybrids and all electric vehicles are rapidly increasing their share of the fleet. General Motors is undergoing fundamental change by abandoning 20th-century technology. The traditional gas tax still generates substantial revenues, but the future revenue outlook is uncertain bordering on dismal.

In fiscal year 2016-17, Michigan generated over $12 billion from individual income tax ($9.573 billion), plus net corporate income tax ($1.105 billion), plus motor fuel taxes ($1.329 billion), according to data from the Michigan State Treasurer Annual Report for 2016-17.

A surtax of 4 percent on each of the revenue sources cited above would generate slightly more than $480 million annually. Allowed to continue for five years, the Infrastructure Rehabilitation Fund would provide $2.4 billion. This revenue stream would be in addition to current financing for infrastructure projects enabling Michigan to recover from past neglect.

The first law of economics is “There is no such thing as a free lunch.” A broad based surcharge of temporary duration is a reasonable alternative to expecting the tooth fairy to solve our problem.

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Kevin Grand
Wed, 03/13/2019 - 7:24am

Mr. Hanieski, like most people talking about roads, is focusing only on the revenue side of the issue, rather than the expenditure side.

Why is there no discussion on why roads aren't lasting? A barely two-year road life on I-75 is now considered good?

Why is there no discussion on the frivolous pet projects that eat up resources which can be better used for actual road construction? The insane obsession with replacing perfectly functioning intersections building Michigan roundabouts should be Exhibit "A" in this discussion.

Why is there no discussion on holding MDOT accountable for the quality of work and lapsed warranties? Letting 52% of your work slide would get you fired in the real world for that level of oversight.

When slip-shod work becomes acceptable in political circles, of course the price tag will rise!

Wed, 03/13/2019 - 8:23am

Exactly the conversation no one is having, but needs to!!

Wed, 03/13/2019 - 8:46am

Illustrates one fix does not fix all. To do all this we need to elect smart people who care about doing whats right rather than electing those who look at holding office as an purely an income source or ego boosting thing.

Wed, 03/13/2019 - 9:30am

Not to digress too far from the issue at hand and the other points you raise, which are valid, but roundabouts are much more cost-effective and efficient than Michigan's "perfectly functioning intersections". Roundabouts take up less space and reduce collisions at those intersections where they are installed. U.S. is one of few countries that, at some point, decided to blindly jump all in for the signal-controlled intersection design. Most states and well-designed/managed cities are moving more and more toward roundabouts. Michigan will need to get on board at some point.

Wed, 03/13/2019 - 9:54am

Roundabouts don't seem to fare well against snow and salt and plow trucks. I'm thinking their life span is shorter than a normal intersection?

Frances O'Neill
Wed, 03/13/2019 - 10:03am

I beg yo differ. I come from nj and for years we had those circles. They got rid of them because of severe accidents. These are fine when there are rural areas but not with heavy traffic

Jason Cole
Wed, 03/13/2019 - 12:12pm

Roundabouts do not have severe crashes. A lot of potential fender-benders, yes, but a properly designed roundabout does not allow the speed or conflict points to have severe crashes.

Thu, 03/14/2019 - 9:46am

That must be an issue specific to New Jersey drivers, because according to the Insurance Institute for Highway Safety, "there is on average a 40% decrease in all accidents and a 90% drop in fatal ones when a traffic intersection is replaced by a roundabout."
As another reader pointed out, you will still see accidents (albeit far fewer than with signal-controlled intersections), but the number of fatal accidents is almost entirely eliminated. Roundabouts do work in rural areas, but are really better suited for heavier traveled intersections as they improve traffic flow and efficiency, ONCE drivers in the area learn how to operate them.

Wed, 03/13/2019 - 2:42pm

Lucas, you obviously have not walked an area where a corner has been switched to a roundabout. The reality is that they have a foot print that is more than double that of a normal intersection on a two lane road. Also they do cost more because they use more cement.

We should also ask DPW departments how they are on road maintenance vehicles in the winter.

The only benefit that I have observed from installing a roundabout, is that they move traffic through intersections quicker. If moving traffic is the goal then they make sense.

However, I would think that if we are using road taxes wisely, we should only install them when roads have deteriorated and need to be replaced, and not tear up intersections that are in good shape.

Kevin Grand
Wed, 03/13/2019 - 8:21pm

I know of a number of truck drivers who would disagree with that glowing assessment.

You can let the mangled number of street signs in and around them fill in the blanks regarding why that is.

Wed, 03/13/2019 - 7:49am

Not to argue your main point but a fuel surcharge shows up on almost every bill I see or i can guarantee it's buried in the shipping of every product we buy, so I wouldn't lose any sleep over free riding on this.

Dick Hooker
Wed, 03/13/2019 - 8:22am

An interesting observation and one I had not carefully considered. Would it make sense to have an "apportioned" set of tax increases, with drivers paying more in either fuel taxes or (Heaven forbid) tolls, with consumers also paying less in the recommended surtax? [In the interests of full disclosure, making I-94 a toll road would solve a multitude of problems, in this writer's opinion!]

Bryan Herter
Wed, 03/13/2019 - 9:50am

Can you make I-94 a toll road? It is a Federal highway

Wed, 03/13/2019 - 11:30am

Not without changing federal law

Wed, 03/13/2019 - 8:30am

We can blame our cureent and former extreme rightwing state politicians who refused to fund the roads when the costs were much less expensive. Eveyone knows road repairs rise expodentially the longer the neglect is allowed. So we need to target the folks who brought us to this expensive end.

Fri, 04/19/2019 - 12:33pm

Cut their pension, life time health insurance, let's not keep rewarding them.

Andrew Herman
Wed, 03/13/2019 - 8:58am

A good start would be to prepare the roads with a much better base and not so fast. I'd rather be I inconvenienced for a week or two longer knowing the roads will last much longer.
Canada has the same weather and their roads are MUCH better than ours.

Wed, 03/13/2019 - 9:34am

This is also a good point. Growing up, there was one concrete road I drove nearly every day and while they would occasionally re-tar the expansion joints, it held up beautifully and it was the road all the combines and huge tractors hauling double wagons and hoppers travelled year round. I loved driving it, and while the rhythm of the tires over the joints was audible, it didn’t bother me any and was sure a hell of a lot better than the potholes. That I know, they never did asphalt over it because of the wear of the heavy loads.

Wed, 03/13/2019 - 10:22am

Much lower population so lower use, maybe?

Fri, 03/15/2019 - 10:32am

Toronto has one of the highest population centers in the world and they have better roads. The rest of Canada that aren't their main cities you're right though

Wed, 03/13/2019 - 3:01pm

The base is important, but even more important is the mix of the cement. If the state of Michigan required a stronger mix the roads would last longer. But the main issue is whether or not our state inspectors are inspecting what we are getting and whether or not MDOT is writing contracts for road that has solid warranties and are they enforcing the warranties where roads fail prematurely.

Linda Looney
Wed, 03/13/2019 - 9:29am

I would prefer an increase of sales tax by 1 or 2 cents. That way, everyone who buys anything in Michigan helps pay to repair the awful roads! If you’re in MI, you are using the roads-you can help fix them!

Wed, 03/13/2019 - 2:19pm

Linda, I'm in agreement with you. Yes for sales tax increase. It makes the most sense. The bigger issue is - earning the trust of the good people of Michigan. People aren't convinced that tax increases of any kind are used as originally promised. Our state and local government (even school districts) need to be 100% more transparent and communicative on how collected dollars are being used. We need proof of fiscal responsibility.

Wed, 03/13/2019 - 9:32am

I am taxed for fuel on my garbage service,anytime I have a tech come for appliance repair...and the list goes on.They don't even hide it anymore.When fuel goes down I don't see a rebate.My husbands company dropped the fuel charge this last year as fuel prices fell.No one else took that off a bill.My garbage bill was a lot higher and it was due to the fuel tax.I called and they said it was pre empratory for next years assumed cost rise. In reality it is like car insurance. They charge you the state mandated overly priced medical forever fee and then give insurance companies leeway to charge an"administration fee" to send that to the state.My admin fee is $20.00 a car twice a year.All companies are doing it now as it is a way to further line their coffers.When you say lets levy a tax for a certain amount of time to pay for roads that has been proven it will never go away.Will always be a reason to have it and people get used to it so heck why not keep it.Townships pay a road tax now in most instances.Allegan township had a rather big one on the rolls..we moved out of that area as our property taxes were out of control.At some point there is no more money and the buck has to stop with something.Try looking at the waste in MDOT.We drivers see it everytime we travel in a construction area.

Mike Radke
Wed, 03/13/2019 - 10:11am

Am I missing something? The numbers just don't add up. There seems to be consensus that the road/bridge problem needs a fix of ~$2.5 billion PER YEAR. (Thank for not raising the specter of alternative facts about this.) The solution proposed in this article would raise~$2.5 billion in five years or ~$480 million PER YEAR . That's one-fifth of what we need. Did I get something wrong?

Wed, 03/13/2019 - 11:32am

Exactly what I was going to say

John Q. Public
Wed, 03/13/2019 - 2:04pm

I really wish consideration for a mileage fee of a penny a mile would gain some traction. We could baseline every vehicle's odometer with its VIN at registration, then charge the fee when new tags are bought each year. 10,000 miles = $100.00. Then it won't matter where you buy your gas, and the gas tax wouldn't have to be raised nearly as much.

John P
Fri, 03/15/2019 - 6:59am

What about those of us who frequently travel out of state?

Allen Wolf
Wed, 03/13/2019 - 5:01pm

Mr. Hanieski's commentary leaves me puzzled:
First, he indicated that the Snyder study says we need $2.3 billion A YEAR. He then goes on to focus on raising $2.3 billion over 5 or 10 years on a one time basis. We clearly need $2.3 billion a year. We don't need a one time fix; we need a long term solution.

Second, everyone would share in a gasoline tax. Most of the services he mentions -- ambulances, delivery vehicles will have to pay the higher tax and they will of course pass those higher costs on to consumers.

Third, the burden would be carried by gasoline powered vehicles. We want to encourage people to switch to less driving and to alternative fuel vehicles. This is important to our clean air and to reducing our dependency on oil. Just like taxing cigarettes and alcohol, we should tax things whose use we want to discourage. Over time, it is true we would need to shift this tax to something else because, hopefully, gasoline usage would diminish to such a low level that it wouldn't generate enough. But that is probably quite a way down the proverbial road.

Evan Martin
Fri, 03/15/2019 - 1:18pm

Well said.

John S.
Wed, 03/13/2019 - 7:12pm

According to Governing, the damage to roadways of a single 80,000 lb truck is the same as the damage caused by 5,000 to 10,000 cars. The state legislature can enact a law that reduces the state's absurdly high weight limit on trucks. They each might lose a few hundred dollars in campaign money from the trucking industry, so I suppose such legislation would never be considered. Trucking companies should be paying a higher fuel tax than they are now. They are partial "free riders" now. Agree with the author that the fuels taxes should not be the entire source of new revenues for the roads. Still, they should be the major source.

Wed, 03/13/2019 - 10:25pm

Why does no one ever mention that Michigan allows some of the highest tonnage limits for semi trucks? I'm tired of wasting my money to allow heavy/over weight semi trucks destroying our roads and bridges. Or how the current funding is allocated which is an absolute mess.... Don't even get me started on the steady stream of Canadian trash and the wear/tear/pollution it brings! Enough of the fluff and politics Lansing, lets rip the band-aid and focus on real solutions and make the hard decisions!

Thu, 03/14/2019 - 3:01am

The nurse who drives to her hospital of work every day to staff the hospital that keeps people alive would best not be penalized for the upkeep of the roads she drives, anymore than the work at home individual who could be the life she saves. Same for all drivers who keep our society functioning.

Thu, 03/14/2019 - 3:18am

Extreme temperature fluctuations between freeze and thaw that wreak havoc with our Michigan roads are only getting worse. Well and expensively constructed road base and surface will last longer and be kinder to drivers' auto repair budgets.
Passenger railway, subway, or other public transportation would best be part of the solution.
I read somewhere that hover cars would float above the surface. These would not be dependent on a road surface. For big problems, think outside the box.

Michael Head
Thu, 03/14/2019 - 8:10am

I like this proposal. I'm not totally clear on how ir would be implemented, tho.

Roger Martin
Thu, 03/14/2019 - 9:48am

While the opinion piece raises good points (including recognizing that Michigan's massive unmet infrastructure needs can't be fixed without significant new revenues), it appears to misunderstand the scope of the problem. We don't just need $2.4 billion after four years, which is what his funding proposal appears to suggest would result. Every independent analysis of our unmet infrastructure needs came to the same conclusion: we need about $2.5 billion or more EVERY YEAR for the next couple of decades just to fix what's broken or in need of replacement today. While $2.4 billion is certainly a lot of money, sadly, four decades of failure to address the problem by every Michigan governor and legislature left us with a crisis deeper than the spring potholes on I-94. At least Gov. Whitmer has the courage to accurately define the problem and what's needed to start fixing it. Now let's see if the Legislature chooses to solve the problem or simply do what every other politician has done for the past 30-40 years and punt.

Roger Martin
Thu, 03/14/2019 - 10:22am

Actually, Michigan Legislatures and Governors for the past 20+ years have "talked about" how to improve the shelf life/quality of roads built in Michigan. I strongly recommend that you consult the folks at MDOT who have all the data, studies and reports you could ever want to read on the subject. Some of the criticisms have been fair, no question. But the bottom line is this: Michigan simply does not invest in its infrastructure anywhere remotely close to what other states with similar populations and climates are investing. It's not even close. Unless and until we do, our roads and bridges, community water systems, dams, stormwater and wastewater systems all will continue to crumble, crack and fail. Most of these systems were built 50, 75 or even 100+ years ago. Until the elected leaders of the state muster the courage to pass a solution, all we'll continue to do is talk, talk, talk.

Fri, 03/15/2019 - 10:21am

All the talk is about taxes/money, do you believe that is what Michigan's future needs?
The courage is in the residents, the voters, when they start telling the politicians what to talk about. Listen to all the comments, they only talk about money so the politicians only talk about money. If Bridge commenters/readers & writers aren't talking about the future and what problems are to be fixed, then all the talk and actions now and in the future will be about money and the roads will still .

As for MDOT, what have you heard from them, have we seen anything about their data describing what is causing such bad rides on Michigan roads? And if they say it is the loading than shame on them, we see extreme loading everyday on the runways and we don't hear about runway failures, for if loading is the only problem then that is bad design, bad construction, bad repairs. If MDOT were about the future they owe the Michigan voters a regular evaluation report on the road and bridge failures, they causes of those failures, and proposed means/methods for preventing such failures. MDOT follows the lead of the politician, they follow the money not the future of better roads.

Roger Martin
Thu, 03/14/2019 - 10:33am

While this opinion piece raises some good points (including recognizing that Michigan's massive unmet infrastructure needs will not be fixed without significant new revenues), it seems to misunderstand the scope of the problem. If I understand correctly, his funding proposal would eventually raise $2.4 billion after four years. Every independent analysis of the state's infrastructure needs completed to date has estimated that we need to invest about $2.5 billion or more EVERY YEAR for the next two-plus decades just to fix what's broken or in need of replacement today. We're in this spot because the governors and legislatures who have served the state for the past 30+ years have kicked the can down the road. At least Gov. Whitmer had the courage to accurately define the scope of the problem and propose a solution that will get us to the investment needed. Now we'll see if this Legislature has the courage to actually propose and pass a real solution.

Thu, 03/14/2019 - 6:27pm

I am reading David McCullough’s book on the building of the Panama Canal. The first part is about how the French tried and failed to build the canal. The people responsible for the project put their energy and creative effort into getting the public’s money to pay for the canal, leaving no time or ideas left to solve the problems preventing them building the canal.
Mr. Hanieski and all the others that are only talk about money and finding different ways to get it from the public are sucking all out hope for change, hope that the roads will be improved, they will last longer, they will be ready for the future.

Money is a means, it is not the solution to any of the problems we face, it is not the solution to changing and improving the roads and bridges we have.

Kyle V.
Thu, 03/14/2019 - 9:05pm

Everyone uses the roads and bridges to a greater or lesser degree.
Who doesn't ? We all need to burden the cost to rebuild. I hit an unavoidable pothole last year and sustained $1,500 in damages.
There should be no free lunch! Stay home, don't use roads and bridges. How long will you survive?

John P
Fri, 03/15/2019 - 6:53am

User fees makes sense. They generate revenue from delivery companies based elsewhere, tourists, and heavier users pay heavier load of taxes. Consumers that don't use roads directly will pay for it the price of the goods. There is no big electric car boom yet. They could pay more in licensing fees if needed. In fact it is passenger cars fading away being replaced by SUV's. Gas tax is still the right answer for now.

frank shepherd
Sun, 03/17/2019 - 9:28am

This sounds like a far better-balanced plan then just taxing gas users... so why is it not being proposed in our legislature?