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

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.

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan. Bridge does not endorse any individual guest commentary submission. If you are interested in submitting a guest commentary, please contact Ron French. Click here for details and submission guidelines.

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