Road funding

The Michigan Legislature has set aside nine days to pass new laws before the end of the calendar year. Bridge has already outlined some of the issues likely to come up in this so-called lame-duck session or early in the next legislative session that begins in January. Today, we offer deeper looks at three measures that may be addressed before the New Year, starting with possible changes to transportation funding. The other issues explored today are Electoral College voting and A-F school grades.

Few can argue that Michigan’s roads stink. They’re pocked with potholes, underfunded by the state and costly for motorists.

Michigan residents are well aware of the problem: 70 percent of the participants in community conversations held by the Center for Michigan in 2013 and 2014 said the state’s transportation infrastructure was an urgent priority. And more than half – 52 percent of conversation participants and 58 percent of those polled by the Center – said they’d be willing to pay more in taxes to fix the roads.

But despite the obvious shape of the roads, and the apparent willingness to fund the repairs, state leaders have had a rough time finding a solution that attacks the problem – Gov. Rick Snyder wants $1 billion in new annual money for roads – with a funding increase palatable to legislators leery of raising taxes.

"I've got to believe it's time," said Tom Casperson, a Republican state senator from Escanaba, who has advocated for additional road funding.

At issue

How bad is it? Let us count the ways:

  • By some measures, Michigan has some of the worst roads in the country
  • It also spends the least on road funding per capita of any state
  • And though the state isn’t spending as much money on roads, motorists are: It’s estimated motorists spend $7.7 billion on extra road repairs, extra time and fuel and accidents because of road conditions. Translation: That’s $357 for every motorist for damaged tires and rims and other repairs caused by the sad state of Michigan roads.

All of the solutions considered so far may not even get to half the problem. Former state Rep. Rick Olson has said he believes the $1.2 billion that Snyder originally sought in 2012 is $1 billion short of the amount of new money needed to improve the roads. The Snyder proposal would just repair the existing network, Olson said.

The state’s gas tax – now at 19 cents a gallon – has remained unchanged since 1997, when it rose 4 cents. And the state is one of just seven states that applies the state sales tax to fuel sales. In Michigan, none of the sales tax revenue, which is over 19 cents a gallon when gas exceeds roughly $3.45 a gallon, is dedicated for road funding.

Because of the sales tax, Michigan had the sixth highest overall taxes on gas in 2013, even though less than half of that – again, at $3.45 a gallon – goes directly to roads.

The legislature did agree in March to a one-time infusion of $285 million in new money for road maintenance, mainly to help county road commissions deal with the huge expense of clearing the snow generated by last winter’s historic snowfalls in much of the state.

But more ambitious plans to repair Michigan’s roads and bridges collapsed in June in advance of the fall elections.

Legislators could not agree on any of the proposals. House Speaker Jase Bolger pitched the idea of replacing the 19 cents per gallon tax (and 15 cents on diesel) with a 6 percent tax on the wholesale cost of either, in addition to other changes. But that plan would not have raised additional money - and with gas prices lower today, it would actually have produced less money.

Bolger’s counterpart in the senate, Majority Leader Randy Richardville, (R., Monroe) had a different proposal, calling for an increase in the gas tax that could, over time, raise the current tax – now 19 cents – an additional 7 cents a gallon and possibly as much as 24 more cents a gallon. It too failed.

The politics

Now, with the elections over, some believe the lame-duck legislature may be more willing to pass a road-funding deal. Snyder, Richardville and others have said it is a priority. And the highly influential Michigan Chamber of Commerce has long supported a massive infusion of cash and its executive director, Rich Studley, recently said the chamber may take the issue to the ballot if Lansing’s leaders don’t solve the problem.

But political trouble could still loom for road fixes if a deal isn't struck before January, when a handful of more conservative Republicans will take their seats in the legislature, welcomed by some sitting legislators who have already signed a “no-new-taxes” pledge. Are moderate Republicans willing to potentially anger voters during the lame duck session before the new legislature takes over?

What we know

Because of the tricky political landscape that will get trickier come January, proponents of a road funding deal are looking at the lame-duck session as the best time to patch a long-unfilled hole. Casperson said he believes a first start may be taking a look at Bolger's more austere attempt. But he hopes the legislature's leaders go for the big fix: a long-term solution that paves the way for smoother roads. It may mean removing the sales tax off gas, replacing it with a roads-dedicated tax ‒ and then tacking 1 percent onto the sales tax to make up for the loss of revenue from fuel sales, as others have proposed. That would be a big change, and a controversial one.

"I'm hoping we take a shot at putting something into this and fix it," he said.

That may be a tall order, and Casperson knows it. "I think we've got a better shot now than in January," he said.

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Comments

CS
Thu, 11/13/2014 - 12:06pm
Why is so little of the gas tax allocated for our roads? Isn't that the purpose of the gas tax? If ALL of the gas tax was allocated for roads - repair, snow removal, etc - would it be enough? (Why does Lansing play around with our tax dollars instead of using them for the purposes we tax payers voted?)
BL
Fri, 11/14/2014 - 11:28am
The big confusion is the gas tax versus the sales tax. In Michigan there is a sales tax on goods, gas has a per gallon "gas tax" and a 6% "sales tax" while tennis shoes for example just have the "sales tax". All "sales tax" goes into the same pot to be spent as constitutionally allowed, i.e. the sales tax on shoes isn't kept aside for one purpose and the sales tax on roads saved for another...just one pot spent constitutionally as MI residents voted. The gas tax however is allocated for transportation purposes only as passed under Act 51. So it isn't the case of Lansing spending funds in areas for which it wasn't meant, the sales tax was never meant for roads. Maybe it should be or maybe gas shouldn't have a "sales tax", but that is a whole different question.
MIchEd
Thu, 11/13/2014 - 5:21pm
I wish you would have included something about the possible loss of education funding attached to the gas tax. I believe it's to the tune of $770 million per year. I'm all for road taxes going to roads...but this administration has already taken $700 million per year dedicated to the School Aid Fund when it did the switch-a-roo on business taxes: the Michigan business tax was ended and replaced with a 6% limited to corporations, a loss of revenue of $1.8 Billion, including a $700 million to SAF. Maybe some think more cuts to the SAF is just fine, but I think we all should know about it. My guess is more Michigan citizens care then do not.
Sherry A Wells
Sun, 11/16/2014 - 8:57am
Two aspects of this issue have been raised in other media, though not recently, and by Green Party candidate for Governor, Paul Homeniuk, that I have not seen even in the Bridge: that Michigan permits truck weights to exceed the 80,000 lb. limit of most states, to 160,000 lbs. (which may be why weigh stations have been closing) AND that other states charge large, heavy trucks at a higher rate than does Michigan. Let's get this info. out, too, NOW!
brokengovt
Sun, 11/16/2014 - 11:17am
Until proven otherwise I believe our road tax has an allocation issue. Shifts in where the money is spent, huge engineering and study funds expended for 'not-going-to-happen' projects like light rail, bike paths, expanded passenger rail, the second Detroit/Windsor bridge debacle and then grants for restoration/remodeling of historic buildings just to name a few. When money is supposedly tight and the need is enormous siphoning off funds for pie-in-the-sky Utopian dreams is not to be tolerated. Adding to the cost of fuels with more taxation simply means all the fluff and waste stay and the additional money compensates for it. The Tax Foundation list above shows Michigan a solid middle ground state for road spending. Why isn't there more money? The feds are constantly increasing regulations on vehicles for more mileage. As that occurs the use of fuels declines. Hybrids and full electric cars pay nothing for the same roads used as everyone else. That's crazy. Like so many other states the annual registration fee per vehicle should be increased capturing the road use cost for everything and everyone. The desire to act quickly before the newly elected members is very telling. It tells us that we are pawns and stupid. "Quick, raise the taxes before it may be to hard from those new folks who represent the will of the people." Since when has the road use fuel tax been corrupted into a transportation tax that fulfills the desires of others, the few, for non-road improvements and creations? It is quoted that we pay a high amount yet have the worst roads. Now just exactly how do you think that occurs? The money comes in, but goes elsewhere.
Rockford
Mon, 11/17/2014 - 4:18pm
Many have stolen my thunder...let's have the 'Big' trucks pay their share of the full gas tax not get preferential treatment of 4 cents for every gallon, with double the load of any other state. Additionally, why are our gas tax dollars being spent for bicycle lanes when virtually none of the riders pay into the system for their two wheeled transportation and what of the 'dedicated' lanes restricted to buses. Do the mass transit buses pay the tax..I bet not!
Paul Beauchamp
Mon, 12/08/2014 - 12:36pm
Just fix the roads and bridges before it is to late