State Fails To Act

By Aram Kalousdian | September 28, 2010

Michigan Governor Jennifer Granholm and the Michigan legislature failed to act on increasing transportation investment in Michigan's deteriorating road system before the end of 2008. This, after a report released by the Michigan Transportation Funding Task Force established by the governor and the legislature came to the conclusion that there must be a doubling of investment in Michigan's transportation system in order to put it in good condition and prevent a loss of up to $1 billion in federal funds each year. The effort will be renewed in 2009.

"After three years of effort, it's disappointing that state policymakers missed an opportunity to create jobs, stimulate our economy and fix the crumbling roads," said Mike Nystrom, vice president of Public and Government Affairs for the Michigan Infrastructure & Transportation Association (MITA). "We all know that something must be done or else we lose thousands of jobs and potentially hundreds of millions of federal dollars originally earmarked for Michigan."

MITA reports that shortly after the decision was made to abandon a vote on a pending transportation investment plan, transportation lobbyists spoke with Senator Jud Gilbert — one of the staunchest construction industry allies in the legislature. The game plan is to reinvigorate efforts in 2009 and form a bipartisan work group to begin working on a new proposal. However, the biggest challenge will be to educate 46 new members of the House of Representatives about the dire needs of Michigan's transportation network.

The governor and legislature must act quickly. Our transportation system and our economy demand it. Maybe a solution needs more studying, but the question of our transportation system needing additional investment does not. In my opinion, this is where true leadership comes in. A true leader is someone who can make the tough decisions, even if they are unpopular. Politicians think about the next election, but leaders also think about doing the right thing, even if that means going against public opinion.

The incoming Obama Administration's economic stimulus plan is, of course, welcome news. It will provide the jump-start that Michigan's economy and the nation's economy sorely need.

The Associated General Contractors (AGC) of Michigan recently released data from its national organization (AGC of America) showing the beneficial impact of economic stimulus investment in Michigan and the overall positive economic impact that the construction industry has on the state's economy.

For Michigan, an additional $1 billion in nonresidential construction spending would add about $2.3 billion to the state's gross domestic product, about $754 million to personal earnings, and would create or sustain 20,000 jobs.

"This stimulus would provide a sorely needed jump-start to Michigan's struggling economy," stated AGC of Michigan President Bart Carrigan. "We are pleased that federal lawmakers, President-elect Obama and others have agreed that our nation can no longer afford to neglect our infrastructure on which we rely greatly for our quality of life. Construction is an engine of economic activity, and needed infrastructure projects will not only repair highways and bridges, ensure clean drinking water and upgrade our children's schools, but will also put needed money back into the economy and spur further economic growth."

Construction contributes nearly 9 percent to Michigan's gross domestic product and contributes greatly to personal earnings to the benefit of Michigan residents working in the state. But Michigan's construction employment has decreased by 31 percent from its peak in June 2000 until today. Construction as an industry often feels the pinch of a down economy sooner and for a longer duration than other major market sectors.

Michigan had 25,000 construction firms in 2006, of which 94 percent were small businesses employing fewer than 20 workers. And construction offers excellent compensation, with Michigan construction workers averaging $49,000 in annual salary in 2007.