No, toll roads are not the answer in Michigan
Michigan will spend $4 billion on roads this year. It does not need to tap taxpayers for more money.
“Highway tolls could raise $1B to fix Michigan roads, study finds,” read the headline of a Jan. 19 story in Bridge Michigan. “Is it time?”
No, it’s not time.
The framing of headline is meant to indicate that there’s a pile of money sitting there, waiting to be grabbed to fix the roads, if only the state would grab it.
The Mackinac Center view: Toll roads, as envisioned by the Michigan Department of Transportation plan, would bilk taxpayers.
If Michigan wants to spend an extra $1 billion per year on roads, the $1 billion in pork projects earmarked by lawmakers would be a good place to find it. If Michigan lawmakers want to show how serious they are about fixing the roads, they should fund a priority shared by 10 million people, rather than projects for a special few donors and friends.
Via Bridge Michigan:
Michigan state government will spend $45.1 billion of its own money in 2023. That’s up from $27.8 billion in 2012-13 and up from 34.4 billion in 2019, when Gov. Gretchen Whitmer took office. That’s 31% growth since 2019. It would seem $1 billion could be found within a large and growing pile of money before asking more from taxpayers.
The people of Michigan are the worst place to start, and this is the worst possible time to ask. And yet in Lansing and the Lansing media, the conversation often starts with the taxpayer.
Yes, Michigan, it is possible to increase road funding without tapping taxpayers. It’s not only possible, Michigan has already done it. Did it this year, in fact.
In the 2023 budget, Gov. Gretchen Whitmer proposed a $481 million increase in state spending on roads, up 13% from 2022.
It took time for Whitmer to come around to this approach, said James Hohman, director of fiscal policy at the Mackinac Center for Public Policy.
In 2019, the year Whitmer took office, she vetoed the Legislature’s $375 million increase in road funding. Whitmer had a failed proposal earlier that year to raise the fuel tax by 45 cents per gallon.
After a successful 2022 reelection campaign, Whitmer said Republicans should have attacked her for proposing the tax hike, which would have given Michigan the highest fuel costs in America. Whitmer told Bridge in December that she does not plan to pursue another fuel tax increase.
By the 2023 budget, “the governor finally agreed with legislators that the state can afford to spend more on roads without raising taxes,” Hohman told CapCon.
In 2019, the Michigan Department of Transportation budget used about $2 billion in state funds. After the 2015 increase in fuel taxes and registration fees, that number increased to $3.6 million. In 2023 it’s $4 billion.
Hohman added that toll roads would be fine as a strict user fee model, where drivers pay for the roads they use.
But that’s not what the Michigan Department of Transportation studied or is pushing for, Hohman said.
“Tolls can be a user fee model,” Hohman told CapCon. “But what they studied explicitly set tolls higher than the costs of usage in order to generate funds not just for the roads being tolled, but for the entire transportation system.
“User fees have to be proportional to the costs of the service, and the MDOT plan is intended to raise far more than the costs of maintaining the roads where the fee is assessed.”
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.