The Michigan Transportation Funding Debate And What It Means For You

We’re proud to call Michigan our home. Whether you enjoy the natural settings of our Upper Peninsula or the urban life of our cities, there’s always something here that will amaze and inspire you. We also believe in Michigan, and in a future that is going to be strong, vibrant, and supportive of the many people who also love this great state.

But if you speak to a Michigander right now about our transportation system, chances are you won’t be feeling the Michigan love. Instead, you’ll probably hear something along the lines of, “Just fix it!”

Governor Snyder discusses fixing the roads in Grand Rapids. Photo courtesy of

Governor Snyder discusses fixing the roads in Grand Rapids. Photo courtesy of

We all know about how our roads, bridges, and public transportation are suffering from a lack of strong investment. Perhaps you’ve had to pay a large maintenance bill on your vehicle after hitting a deep pothole. You wouldn’t be alone. On average, car repairs and maintenance are causing motorists up to an additional $539 a year due to our poor roads. Chances are you’ve experienced firsthand what a lack of funding in our statewide transportation system can do.

But how we ‘fix it’ is a hotly contested issue within the Michigan Legislature, and it has been for a long time. Last spring the House introduced legislation that would bring an additional $450 million to our roads, but failed to fund some of the most important aspects of our transportation system. The Senate responded that this wouldn’t go far enough to keep Michiganders safe (both their lives and their pocketbooks), and the governor agreed. But they never reached a consensus, and transportation funding was left on the shelf over the summer break.

Now we’re back, and there’s only a few short weeks left to make transportation funding happen this year. So what are the options, and what can you do to help?

House Bill 5477

            There are currently two versions of HB 5477 being considered by our Michigan Legislature, and they fund transportation in dramatically different ways. The first (HB 5477 S-13) was passed by the Senate on November 13 as part of a package that will provide a much-needed $1.5 billion for our roads, rails, trails and public transit. This package included several provisions for raising funds, including fines for overweight trucks (HB 5453), changes to vehicle registration fees (HB 4630), and means to reform spending through items like competitive bidding (HB 4251 and HB 5167) and warranties for construction projects (HB 5460). But the bill that’s been the focus of so much debate is HB 5477.

HB 5477 S-13 would switch the current cent-per-gallon fuel tax ($0.19) to a wholesale tax and gradually increase it at a rate of 2% over the next four years. The estimated increase in revenue would be $1.5 billion by 2019, the final year of the tax increases. The added burden on each user would be minimal, estimated by some to be around $10 a month.

Alternatively, HB 5477 H-4 was passed by the House on December 4 and takes a very different approach to funding transportation. It would gradually eliminate the existing 6% sales tax on gasoline while simultaneously converting and then increasing the current cent-per-gallon fuel tax to a wholesale tax. Over six years it would increase the wholesale tax to 13.5%, and raise approximately $1.2 billion annually.

But while it increases money for transportation funding, it takes money away from three very important Michigan services. Currently that 6% sales tax funds public schools, local government, and public transit. Under the House proposal, these services would lose this designated funding. In 2014 alone, public transportation received $53 million. Bus agencies, rail lines and other services would lose that money without any solution to replace the missing funds.

Comparison of the Senate and House Transportation Funding Packages:

Senate Package

House Package

Raises up to $1.5 billion in new revenue annually by 2019 for the complete transportation system, which would go a long way towards meeting the anticipated need of our transportation system. Transfers up to $1.2 billion in revenue annually by 2020 from schools, local government and public transit to fund roads and bridges
Converts the current cent-per-gallon fuel tax ($0.19) to a wholesale tax Repeals the current sales tax (6%) on gas at a rate of 1% per year
Gradually increases the wholesale tax at a rate of 2% over the next four years to 15.5% Converts the current cent-per-gallon fuel tax to a wholesale tax and increases it 1% per year over the next six years to 13.5%
Puts all increased revenue through the full Act 51 Formula, which funds roads, bridges, bus agencies, rail, and nonmotorized options Puts all transferred money through one part of the Act 51 Formula only, which funds roads and bridges
Adds a minimum of approximately $10 per month to each user in gas tax Doesn’t add any new tax, but directly takes money from public education ($888 million) and local government ($121 million) (numbers estimated for 2023). Public Transportation will also lose a significant portion of its funding, which included $53 million from the sales tax in 2014. Depends on projected Michigan economic growth to replace these funds

Why it’s important to fund our complete transportation system NOW.

Copy of Michigan Can't Wait (4)

The Senate is now deliberating ways to move forward with a comprehensive plan that could include components of both the Senate and House packages. As they consider next steps, we’d like to remind our legislators just how important this issue is for the future of Michigan.

With increased funding for our complete transportation system, including public transportation, we’d be able to:

  • Repair Michigan bridges, of which one in nine are rated as ‘structurally deficient.’
  • Invest in our crumbling urban roads, currently ranked an abysmal 45th in quality.
  • Match more federal funds for transportation projects, which would bring more money into the state.
  • More fully support our transit systems with increased funding to buses, rail, and nonmotorized options and receive the associated benefits such as the $4 return on every $1 invested.
  • Improve safety on the road for all users; approximately one-third of all fatal accidents occur due to roadway features.
  • Attract new talent and create new jobs (up to 12,000) by establishing a 21st century transportation system.
  • Financially support public transportation, which is seeing increased ridership and need throughout Michigan in both our rural and urban areas.
  • Support Michigan jobs; transit agencies directly employ more than 5,800 workers in Michigan. If they continue to lose funding for operating costs, these agencies may not be able to continue to provide the same level of service and employment opportunities.
  • Provide transportation options for the one in three Michiganders are too old, too young, or physically or financially unable to drive.

The governor supports the Senate passed funding bills, and so do many transportation advocacy groups across the state. Increased funding that includes public transportation is the most reliable and effective way to not only fund our transportation system, but to also invest in our economic future.



So what can you do?

Lots! Remember, you elected your legislator to represent your interests. So, let him or her know about what’s important to you. Transportation funding will affect your ability to get to work, school, and other great places across Michigan. Funding for our roads and our public transportation means better options for your mom to get to her doctor’s appointment, for your child to get to his baseball game, and for your neighbor to get to her job.

So here are some ways you can get involved:

  • Contact your senator. It’s easy, and now it’s even easier with several Trans4M member groups setting up Action Alerts for you to use. We recommend you take a look at the Michigan Municipal League and Transportation Riders United.
  • Attend Trans4M’s Advocacy Day on Wednesday, December 10. We’ll be meeting with legislators to let them know the importance of funding our complete transportation system.
  • Use your social media platforms to talk about your support for funding transportation. For example, share this post! You can follow us on Facebook and Twitter for information as it happens.

It’s an important time to be a transportation advocate. Join advocates around the state as they tell Michigan legislators that Michigan can’t wait any longer for a real increase in transportation funding.


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