Task Force Report Offers Options

By Aram Kalousdian | September 28, 2010

The Michigan Transportation Funding Task Force, established by the Michigan legislature and Michigan Governor Jennifer Granholm to provide recommendations for funding Michigan’s transportation needs, issued its report on November 10, concluding that Michigan needs to at least double its current investment in transportation in order to prevent a loss of up to $1 billion in federal funds each year and to adequately maintain Michigan’s highways, roads, bridges, passenger transportation, freight transportation, and aviation systems. The report was submitted to the governor and legislative leaders.

Hopefully, the governor and legislature will seriously consider the recommendations in this report and act on them quickly. The report calls for bold action and offers a range of solutions. Bandages cannot continuously be put on Michigan’s transportation system.

Richard K. Studley, co-chairperson of the Michigan Transportation Funding Task Force and chief executive officer of the Michigan Chamber of Commerce, said that he believed that there was a strong feeling on the task force to maintain a system based on user fees, but that “it’s increasingly apparent that motor fuel taxes are becoming obsolete.”

Recommendations by the task force included looking at new and different types of user fees and switching to a greater emphasis on driver license fees and vehicle registration fees. The task force also recommended updating the current state motor fuel tax and switching it from a pennies per gallon tax at the retail level to a percent per gallon tax at the wholesale level at a minimum. “This would help stabilize our funding and could lead to a broader, more comprehensive proposal to reduce or phase out motor fuel taxes entirely as we shift to a new system that better reflects changes in technology and changes in or economy,” Studley said. Dennis Gillow, co-chairperson of the Michigan Transportation Funding Task Force and treasurer of the International Union of Operating Engineers Local 324, explained the economic benefits of investing in infrastructure.

“For about every dollar that is spent on transportation, the spin-off work will be somewhere between $5 and $6 in benefits to the area economy. We can’t stress that enough. Besides getting our roads fixed, this will also help the economy in a huge way. Additional benefits that we’ll receive by getting the roads fixed will be saving the public time by relieving traffic congestion and putting the roads in good condition, thereby reducing crashes, which cost Michigan drivers every year,” Gillow said.

The task force recommended some new initiatives to fund Michigan’s transportation network, including toll roads and public-private partnerships. “The future of our network depends on thinking broader than we have in the past,” Michael A. Nystrom, a member of the task force and vice president of Government and Public Relations for the Michigan Infrastructure & Transportation Association, said.

Other recommendations included equalizing the diesel and propane tax rates with gasoline; enacting measures to control costs that are paid for with transportation funding through inter-departmental grants; redirecting all or a portion of the Natural Resources Trust Fund to transportation; and encouraging local investment in transportation by enabling a broad spectrum of local revenue options statewide.

“The other thing that I think is important to consider about this package is that they are recommendations to help turn Michigan’s economy around. We are in a situation right now where transportation investment is an economic stimulus opportunity. It will help to create jobs; it will help to put an infrastructure in place that attracts those good job providers that we so desperately need here in Michigan. It will also provide a public safety system that is lacking right now in Michigan. We have a situation across the state where there are parts of our transportation network that are on the verge of creating a public hazard, and we need to recognize that and make a change there so that families across the state of Michigan feel comfortable traveling on our network,” Nystrom said.

State Transportation Director Kirk Steudle explained what would happen to transportation funding in Michigan if nothing is done to improve the funding situation. “The biggest fact is that we will leave money in Washington, D.C. In 2010, we will start to have the inability to match the federal money that is available to us without those additional resources at the state level. We will continue to be a donor state, and this will exacerbate the problem. Where in the past, when we got to October, we had the ability to reach in and grab other state’s money that had not been allocated or not spent. Starting in 2010, we will be the donor of that money to other states. Our 95-percent rate of return on transportation dollars sent to Washington will go down even more,” Steudle said.