New road funding program doesn’t begin to solve problem

It took years of deterioration and the hardest winter in a generation, but Michigan legislators are finally facing up to the reality of the state’s woefully inadequate road and highway funding system.

That’s good, but no one should be fooled into thinking that the new funding plan proposed in Lansing this month comes anywhere near to fixing Michigan’s crumbling infrastructure.

The plan introduced by House Speaker Jase Bolger would generate at least $456 million in additional revenue for Michigan roads every year through 2018 through a complicated set of tax shifts. Among the key points:

  • The existing 19-cents-a-gallon gasoline tax and the 15-cents-a-gallon levy on diesel fuel would be repealed, and replaced with a 6 percent wholesale tax.
  • The 6 percent sales tax on fuel, which now goes into the state’s general fund, would go entirely to road funding, except for the money reserved for schools and local governments.
  • 1 percent of the state use tax, paid primarily by businesses, would be dedicated to road funding.

The Bolger plan has some laudable elements. It would be fairer than the existing system because it finally taxes gasoline and diesel fuel equally. Further, it would increase permit fees on overweight and oversize trucks, which do the most damage to the state’s roads. We also like the idea of requiring contractors to provide warranties of at least five years on the roads they build.

The problem is that the new funding system doesn’t go nearly far enough. Gov. Snyder has called for an additional $1.2 billion a year to bring Michigan roads and highways up to good condition; the Michigan Infrastructure and Transportation Association pegs the annual need at an extra $2 billion.

Under the Bolger plan, our roads will continue to get worse and our state will fall further behind on maintenance and upkeep, albeit at a somewhat slower rate. This treatment would slow the bleeding, but wouldn’t bring the patient back to health.

The new system doesn’t solve the problem because legislators are afraid to ask the residents and businesses of Michigan to pay anything more to improve our roads.

The shift from the current flat per-gallon fuel tax to a percentage levy on the wholesale price will be a wash for motorists when gasoline sells at $3.55 a gallon (the state enjoys a net gain above that price).

Most of the additional money for roads would be generated by robbing Peter to pay Paul – shifting hundreds of millions of dollars in revenue that now go into the state’s general fund into transportation, in turn requiring cuts in other undetermined state programs. We’re always leery when politicians talk about using existing funds to pay for new programs without explaining what other services will suffer to pay for them.

To actually bring our roads into good condition, the state of Michigan must dig much deeper, because we have neglected our infrastructure for so long that it cannot be fixed without financial sacrifice.

The Bolger plan has been well received by Gov. Snyder and other state leaders, and it may be the best we can hope for in an election year when legislators are loathe to raise taxes.

Charitably speaking, it’s a step in the right direction, but we have to keep working for a true long-term solution to Michigan’s infrastructure shortfall.


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