Highways win, local streets left ‘in the dust’ by Whitmer’s $3.5B roads plan

Gov. Gretchen Whitmer shakes a hand moments before she began her second State of the State speech on Wednesday, as Lt. Gov. Garlin Gilchrist looks on. (Bridge photo by Dale Young)

LANSING — Gov. Gretchen Whitmer is scaling back her plan to “fix the damn roads,” unveiling a $3.5 billion bond proposal that would help rebuild Michigan highways without a tax increase but saddle the state with decades of new debt. 

The first-term Democrat announced her latest plan Wednesday night in her second State of the State Address, promising to bypass the Republican-led Legislature that last year balked at her proposal to raise money by increasing gas taxes by 45 cents per gallon. 

“It’s time for Plan B: executive action,” Whitmer said in an address before a joint session of the state House and Senate at the Michigan Capitol. 

Her initial plan would have given Michigan the highest fuel taxes in the nation and raised $2.5 billion each year. Her new plan includes a total of $3.5 billion in spending over five years. 

It’s “financed without an increase at the gas pump, and it will do three things: save time, save money, and save lives,” Whitmer said. “So, from now on, when you see orange barrels on a state road, slow down, and know that it’s this administration fixing the damn roads.”

Whitmer also pitched plans to enshrine popular elements of the federal Affordable Care Act into Michigan law and create a legislative task force to tackle high prescription drug prices. She also unveiled an initiative to help parents navigate the state's new third-grade reading law. 

The roads proposal was the most anticipated element of the governor's annual speech before the Legislature, but it will not require legislative approval. Instead, Whitmer will seek bonding authority from the State Transportation Commission, a six-member board expected to consider her request at a Thursday morning meeting in Lansing.

“What she’s focused on is a financing tool,” said House Speaker Lee Chatfield, R-Levering, told reporters after the speech. “If done right, [bonding] can be responsible, but this is not a funding proposal. This is not a long-term solution for roads.”

Others were even more skeptical. On Twitter, Brian Calley, a Republican former lieutenant governor, called Whitmer's plan "the worst kind of shell game. A generational shell game."

Here’s what it means to motorists:

Better highways, but not local roads

Commuters, truck drivers and other motorists who drive highways would likely see the largest benefit from Whitmer’s plan. That’s because proceeds from State Trunkline Fund bonds the governor is pursuing can only be spent to build or rebuild interstates, U.S. highways and smaller Michigan highways like M-1 in Detroit, otherwise known as Woodward Avenue. 

Unlike Whitmer’s earlier gas tax plan, which would have divided new money between state and local road agencies, the bonding proposal will provide no new money to fix neighborhood streets and other local roads that motorists hit the moment they leave their driveway. 

Whitmer’s latest plan would raise $3.5 billion over three years, less than half of the $7.5 billion that would have been generated over the same period with her gas tax. But state transportation bonding is one of the governor’s only tools to boost road spending without legislative or voter approval. 

The plan leaves local roads “in the dust,” according to officials from the County Roads Association. 

“While we all have had bumpy drives on the freeway, and those certainly need repair, every Michigan resident’s daily travels begin and end in their driveway,” said deputy director Ed Noyola.

But the new highway spending will make a meaningful difference for Michigan drivers, said Lance Binoniemi of the Michigan Infrastructure and Transportation Association, a road builders industry group that has routinely pushed for more state spending.

“You’re going to see construction going on and better fixes that are going to last longer,” he said. “With limited resources you end up doing Band-Aids, and with more resources you can do the proper fixes that will last as long as the roads should last.”

Whitmer acknowledged her plan would only boost funding for state-owned trunklines but urged the Legislature to develop a long-term solution that would also increase funding for local roads across Michigan.

“Next time you’re driving down your local street and hit a pothole or see a bridge closed — call up the leadership in this building and encourage them to act.” Gov. Gretchen Whitmer

What roads would be fixed?

The Whitmer administration did not immediately identify construction targets but said bond revenues will “add and expand 122 major new projects and nearly double the amount available to fix state roads and freeways” over the next five years. 

“No politics. No tax increase. Just action,” the administration said in a policy memo. 

A detailed spending plan is expected Thursday at the State Transportation Commission meeting.

MDOT's current five-year plan includes continued work on major modernization efforts on I-75 in Oakland County and I-94 in Detroit, along with projects on I-94 in Jackson, I-196 and I-96 in West Michigan, an I-496 interchange in Lansing, US-131 in Berrien County and the delayed replacement of the Lafayette Bascule Bridge in Bay City. 

Highways tend to be in better shape than other Michigan roads, but they are also usually the most expensive to repair or replace. 

As of 2018, 27 percent of Michigan-owned roads (known as trunklines) were rated in poor condition, compared to 41 percent of all federal aid paved roads in the state and 53 percent of non-federal aid local roads, according to the Transportation Asset Management Council. 

The number of poorly rated state trunkline miles has nearly doubled since 2010, climbing from 3,925 miles to 7,960 miles in 2018, the latest year for which ratings are available. 

No new taxes, but new debt

The fuel tax proposal Whitmer unveiled last year would have raised Michigan fuel taxes by 45 cents per gallon to 71.3 cents. While the governor maintains that a direct “user fee” was the best way to fix crumbling roads, she switched gears because even fellow Democrats wouldn’t sign onto the plan.

It was a serious solution. It was a real solution. It was an honest solution to problems we inherited. But some thought otherwise. Let’s just say it wasn’t warmly embraced.” -- Gov. Gretchen Whitmer

The governor’s new bond plan would not raise fuel taxes or registration fees on Michigan motorists, but it would require the state to spend as much as $300 million a year repaying the new debt. While motorists may see better highways in future years, the state will have less to spend on road repairs in future decades unless officials pursue another tax increase. 

While Republicans have already sounded alarms over the prospect of taking on new debt, which the state would have to repay with interest, they may be unable to stop Whitmer.

The Michigan Constitution allows the state to borrow for road funding by pledging to repay bond debt with future transportation tax revenue. A 1951 law delegates that authority to the State Transportation Commission, which includes one Whitmer appointee and five members who were selected by Republican former Gov. Rick Snyder. 

Advocates say bonding will allow the state to complete major road projects that would likely cost more down the line because of inflation. In the meantime, drivers can benefit from improved roads up front while the state pays for the projects over time.

But critics note that interest payments will drive up the total price for road construction projects and saddle future generations with debt.

Michigan still owes more than $1 billion on road construction bonds, most of which were issued more than a decade ago, and is not slated to pay off the full debt until 2037. 

“So, from now on, when you see orange barrels on a state road, slow down, and know that it’s this administration fixing the damn roads,” the governor said Wednesday evening. (Bridge photo by Dale Young)

“Borrowing means you pay it back with interest, and that means either future tax increases or future cuts to other services –  there’s no two ways around it,” said Patrick Anderson, founder of the conservative Anderson Economic Group in East Lansing. 

“Borrowing without a vote of the people is the same thing as digging deeper into credit card debt,” he said. “It just means that three months from now you won’t have money to pay for your clothing and groceries because you blew it on splurges this month.”

Whitmer appears to have plenty of legal room to issue bonds yet remain under an annual debt service cap, which is currently about $300 million. 

The state currently has about $464 million in outstanding bonds pledged against state transportation revenues, according to the non-partisan House Fiscal Agency. Repayment will cost the state $118 million this year but just $20 million by 2024 and $6.4 million by 2028.

Debate over borrowing

Whitmer's plan is the latest front in a decades-long battle over financing repairs to the state’s aging infrastructure system. Governors before her have utilized both bonding and taxing. 

Snyder, an accountant who warned against borrowing, in 2015 coaxed the Legislature to raise gas taxes by 7.3 cents, vehicle registration fees by roughly 20 percent and divert general fund revenue to roads. 

Former Gov. John Engler, a Republican, issued bonds to borrow more than $1 billion for road fixes under his Build Michigan program, a long-running effort he launched in 1992 that also included a 4-cent gas tax hike in 1997 and more bonding in 2000. 

"Build Michigan is a plan to create thousands of jobs and build the necessary infrastructure for Michigan's future," Engler said in 1992. "Some have said it's easy to raise the gas tax, but with so many Michigan families already struggling to make ends meet – now is not the time."

Engler’s successor, Democratic Gov. Jennifer Granholm, also used bonds to finance road repair projects, including $630 million for her "Jobs Today" program to boost construction employment by speeding up more than 150 infrastructure projects.

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Comments

middle of the mit
Thu, 01/30/2020 - 3:05am

From what this article is telling me, I gather that we have been pushing road funding, just like everything else down the road. And Mike Shirkey is the only one telling us that maybe we need to back to gravel roads.

https://www.freep.com/story/news/politics/elections/2019/09/23/mike-shir...

[[["We've got too many roads," Shirkey told the Free Press in a weekend interview on Mackinac Island.

The number of lane miles in Michigan has increased significantly since 1980, at a much higher rate than the state's population, Shirkey said.

As a result, "we have way more roads per capita than most states do," and reducing the number of roads should be considered as part of a comprehensive road funding plan, he said.

Would he actually favor closing some roads?

“I wouldn’t be afraid of it," said Shirkey, R-Clarklake. "But it’s not an easy conversation."

Shirkey said roads would not necessarily have to be closed, but "maybe some roads need to be allowed to go back to gravel, for instance."]]]

Then there is this from another State news site for those who think that the hinterlands are subsidizing Detroit.

https://www.politicscentral.org/macomb-ranks-as-no-1-donor-county-provid...

[[[As Gov. Gretchen Whitmer is expected to emphasize roads issues in her State of the State address tonight, the latest news is that Macomb County ranks as the biggest donor county in the state for paying the most road taxes and fees that are sent elsewhere.

Nearly all of that donor money – consisting mostly of gas taxes and vehicle registration fees — is distributed to Michigan’s northern, rural counties, according to figures compiled by a state lawmaker.

Under the state’s road funding formula, Macomb, Wayne and Oakland counties lead the list of counties in the southern portion of Michigan who subsidize the roads in the sparsely populated areas in northern Michigan.

The 22 donor counties south of mid-Michigan are collectively sending over $138 million annually Up North for road repairs in the other 61 counties. Much of the disparity results from dramatic population differences and the prevalence of multi-lane roads in the south that are funded in an equal manner as the two-lane highways in the north.

State Rep. Julie Brixie of the Lansing area (D-Meridian Township) analyzed all the state’s 83 counties on the basis of state road revenues per capita. Brixie found that all but one of the donor counties — Grand Traverse County — are south of Saginaw County. The MIRS news service in Lansing reported that those 22 counties are in the top 33 in population based on 2017 Census figures.

If the distribution process was amended to distribute funds based on population, Macomb County would gain about $27.5 million a year in road money. In Wayne County, the gain would be $19.1 million. And in Oakland County the boost would amount to more than $16.7 million. Other populous counties such as Kent, Washtenaw, Ingham and Kalamazoo would also see multi-million dollar benefits.]]]

How does Northern Michigan think that they subsidize Detroit or any other urban area? I don't know. But they sure advertise like they do, especially our politicians.

Are we getting taken for a ride? Or is our ride better off because we are subsidized for a better ride?

You make the call.

Barry Visel
Fri, 01/31/2020 - 12:23pm

I wonder if the increase in lane miles is mostly due to subdivision development where developers build the initial road and then turn it over to the public to maintain. Ditto for water, sewer, etc. Maybe theses roads should be left private since they don’t serve the general public.

Kevin Grand
Thu, 01/30/2020 - 7:09am

Whew!

I'm certainly glad that Michigan has paid off all of its previous bonds before embarking on this program.

I mean, what kind of person takes on more debt before they...oh wait? What was that buried at the end of the article?

"Michigan still owes more than $1 billion on road construction bonds, most of which were issued more than a decade ago, and is not slated to pay off the full debt until 2037. "

I think that you should've led your article with that little nugget of information, Mr. Oosting.

RICK
Sun, 02/02/2020 - 3:56pm

Some of us remember when Rick Snyder pushed for that $1.8 billion tax cut for businesses. That was where our road money went.
When you opt for corporate welfare over maintaining our infrastructure this is what happens. Rick sacrificed our roads (the tax cut was going to 'pay for them and then some') and we didn't get the money back.
Here we are. And us little people now have to foot the bill.
How many more wonderful tax cuts are needed for the wealthiest and big corporations? Never enough for the Republicans. Otherwise those same people wouldn't give the GOP all those 'campaign contributions' (aka legal bribes)!

***
Thu, 01/30/2020 - 8:18am

She could see that any kind of tax increase to repair roads was going nowhere with the public and with the legislature, this solution is not the best but something has to be done.

Dutter25
Tue, 02/11/2020 - 7:55pm

So you think one person’s point of view is better than everyone else’s?
Sounds like a dictatorship to me. Her $.45 gallon tax would have made Michigan’s gas tax the highest in the nation. She wouldn’t compromise so now we get to live with paying for this for the next few decades.

Christine Temple
Thu, 01/30/2020 - 9:10am

Going into debt is something the Republicans don't seem to mind doing. Put it off so that our kids have to pay for it. That's what they have done with the national debt. So, just the highways get done. At least something is going to get done. The counties will have to raise taxes to take care of the county roads, The cities will have to raise their own taxes to take care of their own roads, and so on. I don't like it because that's what I pay taxes for, not the upkeep of the bloated military, the bloated presidency, the bloated Congress, or to fill CEO's pockets . There is something very wrong with our country. I don't like putting our children in debt before they are even born and they will hate us for it.

Steven Martin
Thu, 01/30/2020 - 10:07am

The biggest problem we have in the state of Michigan is the extreme gerrymandered Republican legislature we have been saddled with. They have, for the past years neglected cooperation in finding real solutions to the state’s water, roads educational, criminal justice, and lack of transparency problems but instead have acted solely to protect their monied interests donors. This comes at the expense of the interests of the vast majority of Michigan citizens. Enough is enough.

Stephen Kane
Thu, 01/30/2020 - 5:11pm

Spot on Mr. Martin. Something else republicans did that is forgotten is when Engler was Governor he refused to put enough funding in road repairs to get matching federal funds costing the state a great deal in federal aid for infrastructure repair
. He also removed Governor Blanchard's ban on double tandem semi trailers... when was the last time anyone saw a weigh station in Michigan in operation ? Republicans have been in control of the state legislature for the better part of the last 40 years and the governor's office for a good portion of that time. They have cut taxes on businesses and transferred that burden to the citizens and kicked the can on infrastructure down the broken road.

Dutter25
Tue, 02/11/2020 - 8:05pm

If you don’t like it, move! This state was built around the auto industry and investments in roads should started many decades ago. Lack of planning is and has always been the issue in SE Michigan. Detroit roads are the worse and could have been fixed if not for all the crooked politicians who chose to line their own pockets.

Matt
Thu, 01/30/2020 - 10:26am

Maybe a little out of the box, but here's an idea to cover costs of local and county roads without increasing taxes! Get rid of the Township level of government! A level of government designed for a time of horse and buggy (yes literally!) transportation. Their functions could easily and more efficiently be merged into county or county units and the voters generally haven't a clue or care who these people even are, judging from the pitiful small number of people voting in these elections. Michigan leads the nation in the number of governmental units and elected officials, and this costs big money that I'd bet most would rather see spent on the roads!

Taylor
Thu, 01/30/2020 - 7:53pm

Great time to take out a massive loan as the Michigan younger population is decreasing at a significant amount. That's gonna result in a huge tax burden on anyone currently trying to become established

Barry Visel
Fri, 01/31/2020 - 12:04pm

Dave Ramsey needs to develop a course for public financing similar to how he teaches individuals to be financially self sufficient. We need to require public officials to take the course and pass a test to prove they understood what was being taught.

dale.r.westrick...
Fri, 01/31/2020 - 3:26pm

I attend state representative Graham Filler monthly meetings at big boy in st Johns Mi. One of the persons that attending the meetings make comments about how poorly the process of patching the roads is. I personally feel as he suggested we should get past using a shovel to add cold patch in a pothole and hope the care tires will pack it in. There have been better ways developed and my personal opinion they should be evaluated for their merit.
Dale Westrick

Prof Ken K
Sat, 02/01/2020 - 11:37pm

i find it interesting that “Middle of the Mitt” thinks the sparsely populated rural counties should get less money to maintain their roads so wealthy Macomb County [hardly the “middle of the mitt”] can get more for its streets because it has a large population that buys more gasoline.

We all know. That the real problem is our gross Gerrymandered electoral districts. Our rural counties are part of Safe Districts for the GOP so the GOP Legislature is free just to ignore their problems. Why should the GOP Legislature compromise with Gov Whitmer to finally address funding repair and maintenance of all Michigans crumbling roads as long as the Party is assured it will. Control the State? It is far better to refuse to work with Gov Whitmore so they can claim she didn’t deliver on her promises in 2022. I’ll bet they will try to claim that she’s a bigger liar than their President!

Jennifer
Tue, 02/04/2020 - 9:22am

More debt is not the answer. How about this administration gets a handle on its frivolous spending.

Dutter25
Tue, 02/11/2020 - 7:49pm

Interesting that the governor told everyone in the state of Michigan that she’s going to “Fix the damn roads”. She didn’t feel the need to tell us our children and grandchildren will also be paying for them.
Oh and by the way... if you want the local roads fixed don’t call the governor .