Obama Stimulus Aside, More Money Than Ever Rolling Into State Road Repair Budget
Taxpayers are doing their part, but Mother Nature ensures it’s never easy here
In a climate like Michigan’s, keeping the roads in good repair is challenging, and news stories about the condition of the roads are a perennial media favorite this time of year. The stories often carry an insinuation that motorists aren’t doing their part by paying higher road taxes.
On Wednesday, the Detroit Free Press reported a WalletHub analysis that Michigan ranked 40th in the annual “Best & Worst States to Drive in” rankings.
Chad Livengood, a reporter at Crain’s Detroit Business, recently posted on Twitter: “This isn’t just a Detroit problem. Mound Road in Macomb County should now be called Pound Road. 11 Mile Road is a wreck. Unless state leaders feel a groundswell of scorn over the embarrassing condition of Michigan’s roads, transportation experts warn it’s going to get worse.”
ForTheRecord says: If taxpayers are concerned about the condition of Michigan’s roads, they should know that it’s not their fault. The state agency in charge of road repairs has more money coming in now than in any other year, with one unusual exception.
In the 2017-18 fiscal year, the Michigan Department of Transportation is projected to receive $3 billion in state tax and fee revenue. MDOT’s total budget — a combination of local, state, federal and private funds — will be $4.3 billion in that year.
And more money is on the way.
Three laws enacted in 2015 are bringing in more for roads. The money will come from Michigan fuel taxes, vehicle registration taxes and the state income tax.
In 2015, the Legislature increased the gas tax from 19 cents per gallon to 26.3 cents per gallon, and the diesel fuel tax from 15 cents per gallon to 26.3 cents per gallon. Both increases went into effect Jan. 1, 2017. Lawmakers also approved a 20 percent increase in vehicle registration taxes, effective Jan. 1, 2017.
A related bill earmarked $150 million in state income tax revenue to road funding starting Oct. 1, 2018. The earmark will rise to $325 million in the 2019-20 fiscal year and $600 million annually starting the following year.
MDOT is the agency in charge of maintaining state roads, and it now receives more funding than at any other time, save for the Obama stimulus program. In 2008-09, federal stimulus dollars increased federal contributions to Michigan transportation spending by $2.4 billion. By comparison, in 2017-18 MDOT is projected to get $1.3 billion federal dollars.
MDOT maintains about 10,000 miles of state highways and over 4,000 highway bridges. The department also distributes a share of state road tax receipts to county road commissions, cities and villages to maintain local roads.
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.