A Record In Snyder’s Last Budget, Transportation Budget Down in Gov. Whitmer’s First

After reaching record levels in the previous year’s budget, the amount of revenue allocated to the state fund that covers road repairs and other transportation spending will go down in the fiscal year that began on Oct. 1. This will be the first decline in the Michigan Transportation Fund since 2015, after it reached record levels in the 2018-19 fiscal year.

State revenue allocated to the fund goes mostly to road repairs, with 10% to municipal transit agencies. The fund received $3.64 billion in state revenue in 2018, plus additional federal dollars. This year, $3.61 billion in state money have been allocated to the fund.

The decrease is due to a dispute that led to Gov. Gretchen Whitmer vetoing $375 million the Republican-controlled Legislature had allocated to the transportation fund for the 2019-20 fiscal year.

In 1974, the fund collected the equivalent of $3.37 billion in 2019 dollars, a inflation-adjusted level it did not reach until 2018.

The only other time the transportation fund has exceeded $3 billion (in 2019 dollars) was in 1978, when was at $3.18 billion.

The Michigan Transportation Fund’s record-setting revenue in the recently ended fiscal year was due in part to a 2015 legislative compromise that authorized a 7-to-11 cent per gallon motor fuel tax increase and a 20% vehicle registration tax increase. Those increases were matched by steps to gradually earmark $600 million in annual state income tax revenue to road repairs.

In her first budget, Whitmer called for a 45-cent per gallon tax increase, expected to raise another $2.5 billion. The governor also called for $600 million of that amount to go to replace income tax dollars she would remove from the road repair budget and transfer to other spending categories.

Whitmer’s office didn’t respond to an email seeking comment.