More Tax-And-Spend For Michigan Roads? Scholar Says ‘Maybe’

Michigan’s roads are in better shape than some politicians are claiming. That's according to a study released this month by the Mackinac Center for Public Policy.

“Seventy-five percent of state roads, roads with an ‘I,’ ‘U.S.,’ or ‘M’ designation are in fair or good condition,” said the study’s author, Chris Douglas. “However, the Michigan Department of Transportation projects that by 2024, only one-third of these roads will be in fair or good condition. The Michigan Department of Transportation estimates that an additional $1.13 billion is needed per year to prevent this from happening.”

Douglas is chairman of the Department of Economics at the University of Michigan-Flint and a member of the Mackinac Center’s Board of Scholars.

These roads, trunkline highways, include all state highways in Michigan and carry 75 percent of the state’s truck and commercial traffic, and more than half of the state’s passenger traffic. Ninety-five percent of trunkline bridges are also rated in good or fair condition, with 5 percent rated in poor condition.

The study notes that there is a bigger problem with local roads, with half of them in poor condition. But 90 percent of village and city bridges are in good or fair condition, with 10 percent in poor condition.

“I estimate that $3 billion per year is needed to address all of the roads in poor condition,” Douglas said.

Repairing Michigan’s roads has become an issue in the gubernatorial race between Republican Bill Schuette and Democrat Gretchen Whitmer.

Whitmer has proposed spending an additional $3 billion annually for road repairs and has not ruled tax hikes. She sees $2 billion of this amount coming from state revenue sources and $1 billion from the federal government.

Schuette has called for an audit of the Michigan Department of Transportation, ensuring the state is receiving the proper funds from the federal government, and using savings expected from the recent repeal of the state’s prevailing wage law. He also wants to give a higher priority in the state budget to road repairs.

In the new Mackinac Center study, Douglas offers a specific plan for road funding. Ideally, he said, those who use the roads should continue to cover most of their costs through user fees. That could be done through gasoline and vehicle registration taxes, which motorists currently pay, or possibly a tax based on the number of miles a road user travels.

“I estimate that commercial trucks pay far less in diesel taxes than the damage they cause to the roads,” Douglas said. “Bringing the diesel tax in line with this would be a good step. A vehicles-miles- traveled tax would assess a fee per mile driven. It would basically be like a toll road but without toll plazas and could be used for all roads, not just limited access highways.”

Douglas called for an overhaul of the current state transportation funding structure and no longer earmarking some road tax dollars to economic development projects and mass transportation. This way, people could be more paying more directly for the services they use.

“Right now, cities in Michigan with populations over 25,000 people get a road funding allocation based on the number of state roads within the city limits, even though the Michigan Department of Transportation, not the cities, are responsible for maintaining these roads,” Douglas said. “These road funding dollars would be more efficiently utilized for statewide road repairs.”

Among his other recommendations:

• Remove special commercial truck exemptions for vehicle registration fees.
• Prioritize the trunkline system at the state level.
• Base the vehicle registration (license plate) tax for passenger cars on weight.
• Eliminate an ineffective Transportation Economic Development Fund (which earmarks some road tax dollars to projects benefiting a few private projects and facilities) and the state’s Comprehensive Transportation Fund (which diverts some road tax dollars to airports and local bus agencies).
• Make it easier for local governments to ask residents if they want to pay more to fix local roads through property tax millages dedicated to that purpose.