Michigan Road Spending Near an All-Time High

It may seem that Michigan is spending less and less money on roads. But state spending on roads this year ranks near the all-time high and is at the same level it would have been had voters approved Proposal 1 in May.

“This year’s road funding budget is worthy of praise,” said Rep. Peter Pettalia, R-Presque Isle, chair of the House Transportation Committee.

“At $3.9 billion, it is the largest transportation budget in state history, except for one in 2009 that used federal stimulus money and one some years back that involved the sale of permanent license plates.”

“Anyone who drives as much as I drive knows that we have projects under way all around the state,” Pettalia continued. “Money is being spent on roads — $400 million from the General Fund in the current budget. The biggest problem we have concerning road funding in this state is in agreeing to what should be the source of a regular revenue stream that we would put into roads each year. But that does not mean that we aren’t spending significant dollars on our roads.”

Michigan is spending $3.8 billion on its roads in the current (2015–16) fiscal year; that is a $171 million increase over the previous fiscal year. Nearly $2.2 billion is from funding sources dedicated exclusively for roads and about $1.25 billion is federal funding. Of the rest, $400 million comes from the state’s General Fund. Local and private funds provide slightly more than $50 million and about $4 million comes from interdepartmental grants.

The $400 million in General Fund dollars represents a major slice of the portion of road funding that Gov. Rick Snyder and the Legislature have been arguing over. Some people maintain that roads should be subjected to the same prioritization process as other government programs and that the General Fund is an appropriate source for this portion of the overall road funding picture. Others, however, maintain that General Fund dollars only should be used for government programs other than roads and that new funding sources specifically earmarked for fixing and maintaining roads (such as increased taxes and fees) are needed.

As things now stand, the General Fund is being tapped for road funding and the total amount of dollars being spent on the state’s roads — when compared to spending levels of previous years — is not meager.

“Legislators get beat up in the media for not having a solution for the roads,” said James Hohman, the assistant director of fiscal policy with Mackinac Center for Public Policy. “But they found $400 million of extra money in the budget to put toward road repair without raising taxes this year, the same amount that the proposed long-term solution (Proposal 1) was expected to generate.”