Local governments are hopeful, cautious about state road-funding plan

Apr 7, 2014

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The organization championing the interests of Michigan’s local governments is withholding judgment on a proposal to fix the state’s roads.

Officials with the Michigan Municipal League say they’re cautiously hopeful about the plan Republican State House leader Jase Bolger unveiled last week.

Bolger’s proposal includes a number of measures that would generate revenue for roads—supposedly about $500 million a year by 2018—without raising taxes.

League legislative associate John LaMacchia said local leaders welcome any effort to address the state’s deteriorating roads and other transportation infrastructure.

“But the devil’s in the details on this one,” LaMacchia said.

The plan calls for diverting money from sales and other taxes that normally go to the state’s general fund. LaMacchia said that “should be a concern” until we know more about where that money will come from.

Bolger’s plan also includes moving from a flat tax on gasoline and diesel fuel, to a percentage tax based on wholesale prices. That would effectively raise diesel prices, generating an estimated $47 million a year.

The proposal would increase fees on permits for overweight and oversize trucks, raising an estimated $4.5 million. And it includes efficiency measures like more competitive bidding for local and state road agencies, and requiring all projects with a price tag greater than $5 million to have a minimum five-year warranty.

LaMacchia said municipal leaders strongly support many elements of the plan—but they also want to see more details before signing on.

“At the end of the day, we want to make sure that it is clearly defined where those dollars are; how they’re going to be spent; what the projection for that revenue looks like in the future; and if it's going to be sustainable,” LaMacchia said.

There’s also widespread agreement that while this plan is a positive step, it’s far short of what’s really needed to fix Michigan’s crumbling roads.

Governor Snyder has said the state needs to spend more like $1.2 billion a year over 10 years to make real improvements. A construction industry estimate recently pegged it at closer to $2 billion.

So while many observers are glad to see movement on the issue, they also hope this is just the beginning.

“This isn’t the big, grand solution,” LaMacchia said.