A new report says Michigan’s road and bridge funding gap is growing.
In 2016, the state’s 21st Century Infrastructure Commission estimated Michigan needed to invest an additional $2.2 billion annually in roads and bridges.
The new report (Michigan Transportation Infrastructure Needs and Funding Solutions) by Public Sector Consultants looks at the cost of maintaining all of Michigan’s roads for the next fifty years. The report estimates it will cost $3.9 billion more annually than is currently being spent just to maintain Michigan’s roads and bridges.
Brad Williams is with the Detroit Regional Chamber of Commerce. He said state leaders can no longer wait before coming up with a funding solution.
“The cost of inaction is not just imagined here...it’s real,” said Williams.
The report included five options for closing the funding gap:
Option one would require a motor fuel tax increase between $0.39 to $0.74 per gallon to meet the funding gap. The tax rate increase ranges from $0.39 per gallon, which meets MDOT and CRA estimates, to $0.74 to meet PSC’s modeled estimates for different pavement life cycle maintenance levels.
Option two would also increase the motor fuel tax and assess the motor fuel tax on a per dollar (instead of per gallon) basis. This increases revenue during times of higher gas prices, but similarly decreases revenue during price downturns. Other states have moved away from this approach due to its volatility.
Option three would increase the sales tax and dedicate the increase to transportation funding. It would require a sales tax increase of 2 to 3 percentage points dedicated to transportation to meet the funding gap. This option would require an amendment to the Michigan Constitution.
Option four would allow local communities to pursue sales tax increases. While local communities are currently prohibited from charging their own sales tax, this could be changed through a constitutional amendment and could provide local units of government a revenue source for local roads. This option is similar to option three.
Option five would generate revenue based on the miles traveled on Michigan roads; a tax between $0.03 and $0.05 per mile traveled would be necessary to meet the funding gap. Different states and countries have explored this approach in different ways, and the federal government is currently providing funding to pilot this model.
A coalition of business and civic groups, including the Michigan Municipal League, the Michigan Chamber of Commerce, the County Road Association of Michigan and the Michigan Infrastructure and Transportation Association on Tuesday called on the state’s elected leaders to take action.
“The depth of the problem is large, but the cost of doing nothing is even higher,” said Jim Holcomb, the president of the Michigan Chamber of Commerce.
The coalition members agree that the ultimate solution is likely a combination of the different options. Several said Michigan lawmakers cannot afford to “kick the can down the road.”
