Cost of Kicking the Transportation Funding Can Down the Road: $5 Billion

Big Fix Remains Elusive For Committee Members

Joint meeting of the House Transportation & Infrastructure Committee and Appropriations Subcommittee on Transportation on Wednesday, October 23.

Joint meeting of the House Transportation & Infrastructure Committee and Appropriations Subcommittee on Transportation on Wednesday, October 23

Transportation funding conversations picked up again on Wednesday, October 23 with a presentation by Michigan Department of Transportation (MDOT) Director Kirk Steudle. Speaking to a joint meeting of the House Transportation and Infrastructure Committee and Appropriations Subcommittee on Transportation, the director updated Michigan’s transportation funding situation and explained his department’s use of funds against a barrage of questions from representatives. Steudle reminded representatives that Michigan needs $1.5 Billion in additional annual investments to fix its transportation system, echoing Governor Rick Snyder’s call for additional funds. Committee members took a short-sighted approach by arguing over MDOT’s use of money, and avoided discussing future implications of failing to fix the transportation budget. Steudle said Michigan Transportation Fund (MTF) revenues have edged up slightly in the past few years, but due to an increase in debt services incurred from previous projects, real purchasing power (money to spend) has actually gone down.  Transportation investments are at a 12-year low and road conditions continue to reflect the lack of investment. Waiting to fund road fixes will only make things worse, Steudle said. Without additional investments by 2015, it will cost $8 billion to bring 90% of state trunkline roads into good condition; $5 billion more than it would cost us to do the same today.

PayNowOrPayMoreLater

By delaying a decision on new transportation funding until 2015 – the next legislative term – it will cost $5 billion more to bring 90% of Michigan trunkline roads up to good condition.

Steudle devoted a significant portion of his presentation to MDOT efficiencies;  money-saving measures that include closing facilities, 15% staff vacancies, and electronic signatures and forms, which will save MDOT $63 million over five years. He finished by introducing MDOT’s 2014 budget of nearly $3.6 billion.

Questions from representatives generally had the Director defending MDOT’s allocation of funds. Several representatives took to grandstanding about how MDOT could save millions, ignoring Michigan’s need for billions to fix our transportation system. Representative Marilyn Lane (D-Fraser) strongly questioned Steudle about several of the department’s budget areas, suggesting more local control for design and engineering services and transportation economic development (specific projects to attract new businesses).

Other representatives, including representatives David Rutledge (D-Superior Township) and Andrew Kandrevas (D-Southgate), inquired about MDOT’s budget areas, continuing the conversation on short-term fixes. Kandrevas asked the Director if MDOT could pursue an additional 10% in efficiency savings and devote saved money to road projects. Director Steudle replied that as MDOT is asked to improve its efficiencies, other agencies that receive the same funding (Public Act 51) should be asked to increase efficiencies as well.

Representative Scott Dianda (D-Calumet) asked Steudle what percentage of funds go into actual road construction and maintenance—concrete and asphalt – that directly benefit constituents. This question was echoed by several other representatives. Steudle did not have a number on hand, but said that as much money goes into construction as is possible and that the percentage is highly project-dependent.

Representatives’ questions were direct and pointed – they like using transportation funds more efficiently – but the inquiries skirted the heart of the matter. For Michigan to have a 21st century transportation system, additional funding will be necessary. As Steudle told the legislators, delaying a serious transportation funding increase until 2015 “will cost us $5 billion from inaction.” If legislators simply put this decision off until next term, we will need nearly five times the funding increase that MDOT and Governor Snyder are asking for right now. That’s an expensive can to kick down the road. Efficiencies can provide a stopgap, but true reform is needed to fix Michigan’s aging transportation system.

By Jeff Prygoski, Transportation for Michigan Fellow

4 Comments on “Cost of Kicking the Transportation Funding Can Down the Road: $5 Billion

  1. Pingback: Trans4M Year End Review: 2013 | Transportation for Michigan

  2. This is the last thing Michigan needs, with our economy in a terrible state, our so called leaders seem to want to make things harder for us, and wonder why everyone leaves our great state

  3. Pingback: State of the State Preview | Transportation for Michigan

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