For Roads, State Solutions Help, But Cities Need More

Without local financing tools, GR streets will continue to crumble

With little options, Grand Rapids will likely extend an income tax to pay for street maintenance.

With little options, Grand Rapids will likely extend an income tax to pay for street maintenance.

But unless state lawmakers offer more local financing tools amid the state transportation debate, city streets will continue to crumble.More money is needed for transportation in Michigan, especially when it comes to rebuilding our freight and passenger rail network, improving transit, maintaining the roads we already have, and building our cities.

Last month, Gov. Rick Snyder unveiled more details of his plan to raise an extra $1.2 billion to maintain Michigan’s crumbling roads, bus networks, and railroad tracks. Under his proposal, drivers would pay an additional 14 cents for gas, 19 cents for diesel and higher registration fees.

So far, the proposal—while imperfect—makes sense. It would raise money from those of us who use the roads and would distribute a higher percentage of that money to transit and rail. In fact, his proposal dedicates millions more money to transit and rail than any other governor in the past.

Others proposals would ask voters to replace fuel taxes with a statewide sales tax. One of those bills would even dedicate a portion of any new sales taxes to widening highways through urban areas, like the $1.3 billion project to widen I-94 through Detroit. Those outdated and shortsighted ideas won’t go very far.

The governor’s proposal, which is worthy of support from transit advocates, still falls way short in raising the money officials in Grand Rapids say is needed to maintain the city’s extensive network streets and bridges.

Grand Rapids will need another $15 million each year just to prevent almost all of its streets from dropping into “poor” condition, according to a task force set up by the city’s planning department.

Within three years, 80 percent of the streets in Grand Rapids will be in poor condition. In just six years, that number reaches 90 percent, according to Christopher Reader, a member of the city’s Sustainable Streets Task Force set up by city staff. He says a state funding increase is needed, but it’s not enough.

“Current proposals at the state level, if passed, lead us to expect an increase of $6 million in state gas taxes per year for our streets,” Reader wrote in a Grand Rapids Press column. “The citizens of Grand Rapids will still face a $9 million dollar shortfall.”

(Coincidently, the Michigan Department of Transportation will spend $7 million widening U.S. 131 just north of the city’s center.)

To make up for the street funding shortfall, city leaders are expected to extend the city income tax rate after the current one expires in 2015.

That’s one of two options available to the city. The other is to raise property taxes, which most experts say unfairly places the burden on the shoulders of city dwellers when drivers outside of the city are using the roads. And property tax dollars are under increasing competition with other essential services like schools and fire departments.

“A property tax solely on the citizens of Grand Rapids was considered, but this is not fair because of the number of people who rent and work in the city also placing stress on our streets,” wrote Tommy Allen in a Rapid Growth Media.

“Other plans include moving away from the tax per gallon to a vehicle miles tax (VMT),” Mr. Allen said.

The task force is looking at VMT and other ideas to pay for their streets.

A long-term solution is certainly needed, but without more local options and local financing tools, cities like Grand Rapids will be stuck in the gutter.

It’s not just Grand Rapids that needs solutions. Other cities are looking for local ways to pay for local transportation needs. Many Ann Arbor officials say their voters would support a local way to pay for crucial transit projects that will connect commuters to downtown. And Detroit must find local ways to pay for a rapid transit system that it hopes to build over the coming decades.

So instead of holding communities back, state lawmakers must make more local financing tools available to communities.

Like other communities around the country, Michigan’s towns can start meeting their transportation needs without waiting for the state to solve the state transportation crisis.

It’s not a new idea in Michigan. In 2008, lawmakers introduced bills that would have granted local governments the ability to ask voters how they wanted to pay for their own transportation projects: through local sales taxes, local gas taxes, property tax transfer fees, or license and registration fees.

Other common financing tools include parking revenue and rental car fees, two ideas that have been considered this year in Lansing.

Now is the time to stop holding cities back and finally give them the local tools they need to build world-class cities with world-class transportation.

State funding is crucial, but cities need more tools, too.

Written by James Bruckbauer, Michigan Land Use Institute’s transportation policy specialist (Trans4M Member). This blog post was originally published on the Michigan Land Use Institute Blog (Trans4M Member). 

One Comment on “For Roads, State Solutions Help, But Cities Need More

  1. Yes, yes and more yes. Although Grand Rapids’ City Income Tax option puts them worlds ahead of most other Michigan cities in their options for raising revenue – most cities do not have an income tax, and as a veteran of Ypsilanti’s last income tax push I feel I can safely say they’re unlikely to ever get one. So while GR has one option, the rest of the state have none. Many cities have already cut their parks departments, reduced staff, consolidated their police and fire services and still have no ability to make the investments they need to make in a viable transportation future.

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