Transportation Funding Options, Infrastructure Modernization – Latest from the Legislature

A “better, faster, cheaper, smarter, safer” Michigan Department of Transportation (MDOT) and ideas for transportation funding reform topped the agendas of the first two joint meetings of the House Transportation & Infrastructure and Senate Infrastructure Modernization committees met on February 12th and 14th.

MDOT Director Kirk Steudle

MDOT Director Kirk Steudle

In Tuesday, February 12’s meeting, MDOT Director Kirk Steudle presented innovations to infrastructure within MDOT, making it more efficient. He highlighted statistics of a reduced staff size, business practice efficiencies, and more efficient materials and usage in construction work.

Senator John Pappageorge brought up 2012’s SB 351, which would designate all of the state’s gas tax revenue for the state transportation fund. Currently the state gas tax revenue is distributed to multiple budget areas, contrary to the common public belief that the gas tax is a “user-fee”, paid by users for the roads they use. While the Senate passed the bill, the House put a one-year sunset on the bill. Pappageorge urged the Representatives present to not repeat last year’s actions, and pass the bill – reintroduced this year as SB 6. Pappageorge also advised the joint committee that we need to first tackle how we are going to get the money for an increase in transportation funding, and then tackle Public Act 51.

Representative Margaret O’Brien asked why if Michigan has one of the highest state gas taxes, our transportation infrastructure is so poorly funded. Steudle explained that while our gas tax is high, the amount of it that actually supports transportation infrastructure is not.

In a discussion of the gas tax and related options, Senator Mark Jansen asked how much would be enough for the gas tax. Representative Marilyn Lane brought up whether trucking fees were adequately portioned by weight. Steudle noted that new diesel tax is another option.

Senator Jack Brandenburg brought up a survey on Michigan county road asset management from Michigan Tech. According to him, when people surveyed were asked if their county has an asset management system, 67% said no and 19% said they did not know. Brandenburg inquired about why more counties were not using a “Worst First” strategy when fixing roads, because he felt that this should be a priority. Steudle explained that nationwide, the “Worst First” approach has been proven to be ineffective, because money and resources are sunk too deep into poor roads, while good and fair roads are left to deteriorate further. Before the worst roads are fixed, good and fair roads get worse, and it becomes a constant cycle of sinking money into the worst roads, without ever getting ahead. Steudle explained that the Mix of Fixes approach allows for some funds to be spent on maintaining good and moderate roads, and other funds to rebuild to poor roads.  Brandenburg, joined by Senator Darwin Booher, kept up a continued stream of questions regarding asset management.

In the follow-up meeting on Thursday, February 14, Steudle returned to the two committees with answers to their questions from Tuesday’s meeting. Steudle advised the committee that if they act soon and pass legislation within 3 months, MDOT could begin new work next year, however if nothing is done until the fall or winter, it is not likely that a new plan could begin to be implemented until after.

Representative Mike McCready offered up the idea of a combination of small things that could raise approximately $600 million more for transportation; ideas he culled from more than 500 calls and e-mails from constituents over the past month. His idea was to pass SB 6 as suggested by Senator Pappageorge in the last joint meeting, raise gas tax seven cents – as a one-cent increase will bring in $44 million – make the diesel tax even with the gasoline tax, and increase registration fees by 20%. According to McCready these were ideas that constituents of his were open to.

Steudle also raised a new avenue to be researched regarding the economic impact of roads: how much fresh produce do we lose annually due to bumpy roads? According to cherry and apple farmers he had spoken with recently, they estimate that approximately 10% of their produce goes bad due to bumpy roads. Along this topic of produce trucks, Representative Lane pointed out the reduced registration fees that many produce trucks get to use, and that many trucks if small enough or used by small enough farms, go unchecked. This she said could be an opportunity to raise additional transportation funding.

Senator John Pappageorge (R-16)

Senator John Pappageorge (R-16)

Another idea Senator Pappageorge put on the table for these two committees was a change to the way local curb repairs are handled. Current laws fund such work with a lien on property owners; if this “lien” is changed to a “tax” to the property owners more people would be open to committing to curb repair petitions because they would not be still held liable for paying off a lien on the work should they choose to move. In the case of a property owner moving, the new property owner would inherit the tax. Representative McCready had come to him with this idea.

Senate Majority Leader Randy Richardville announced Friday that Governor Snyder’s proposals for a 60% increase in vehicle registration fees for cars and light trucks and fourteen-cents-per-gallon increase in unleaded fuel were off the table. While this has caused some to worry about the fate of the transportation funding topic on the legislature’s agenda, Steudle doesn’t appear concerned. Instead he seems encouraged by the “stirring of the pot” in this discussion.

Scott Clein, President of Giffels Webster, sees the biggest challenge in this transportation policy discussion as the presentation, writing, “In short, no one has described the proposal adequately enough to inspire Michiganders to support paying higher gas taxes and increased vehicle registration fees.” As Clein explained in his Detroit Free Press op-ed, “streets can bring life to a city like few other public works.” While the Governor’s Office and Steudle have continued to present and re-present data and numbers demonstrating our need to invest more now to save us from paying much more in the long-term, legislative discussions have remained clouded in debating tax raises. Unfortunately though, none of this has proven flammable enough to spark motivation to make these transportation funding increases happen. The punchline? In Clein’s words, “In typical Michigan fashion, we still lack an all-encompassing transportation policy that supports the changing tenets of good design.”

By: Dan Sommerville, Transportation for Michigan Fellow

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