When Ford Motor Co. announced this month it would invest $2 billion in Michigan facilities, creating 3,200 “good-paying UAW jobs,” Gov. Gretchen Whitmer touted her success in growing the home state industry.

But Whitmer’s claim that Michigan has added 25,000 auto jobs since she took office lacks context. It doesn’t account for all the auto jobs lost. By that measure, Michigan is actually down 1,600 jobs, according to U.S. Bureau of Labor Statistics data.

Comparing April 2022 to January 2019, Whitmer’s first month in office, Michigan had 167,900 jobs, down from 169,500. The data counts jobs in auto and auto parts manufacturing.

“Ford to Invest Two Billion to Create New Manufacturing Jobs in Michigan,” read the headline of a June 2 press release from the governor’s office.

Whitmer’s claim: “Michigan has added nearly 25,000 auto jobs since I took office and we continue to lead the future of mobility and electrification. Let’s continue in this spirit of collaboration to keep growing our economy, creating jobs, and advancing the future of mobility and electrification.”

The announcement was made at the Mackinac Policy Conference, with the entirety of the Michigan media and PR apparatus present. It was big news, and treated as great news.

But James Hohman, the Mackinac Center’s director of fiscal policy, sees a sleight of hand in the announcement.

“Job announcements aren’t data,” said Hohman. “A lot of jobs that make it into announcements don’t actually turn into real employment. And it’s again, only counting the positives and not the negatives. How many auto jobs are there? There’s a survey for that. There’s good data for that, and we should use that.”

And that data shows a net loss of 1,600 auto jobs.

At last year’s Mackinac conference, Whitmer announced a puzzling plan to electrify the damn roads. The very next week, Ford announced it was investing nearly $6 billion in electric vehicle facilities in Kentucky and Tennessee. Between the two states, there would be 11,000 new jobs.

In the time since, Ford has spun off its electric vehicles, its future, from its internal combustion vehicles, its past and present. After a century in Michigan, it looked like Ford’s future was elsewhere. Ford’s announcement was a welcome data point in the other direction. Provided that many jobs actually are created.

Auto jobs are important in Michigan. They pay well, and many don’t require a four-year degree. They have funded many a college education, a family trip and a lifetime memory.

New auto jobs will always be celebrated in Michigan, and especially jobs involving electric vehicles. If EVs are the future – a leap Ford has tried to make for more than a century, going back to when Henry Ford commissioned Thomas Edison to build an electric vehicle, which Edison failed to do – it is best if that future happens in Michigan.

But the top-line number, “jobs added,” or touting the numbers from job announcements, does not tell the full story. It only tells half.

Is Michigan’s auto industry growing, compared to January 2019? Depends on the month.

The numbers have taken major swings since then, down to as low as 63,300 in April 2020, at the height of the COVID-19 pandemic, when Whitmer issued stay-at-home orders, and as high as 178,000 in February 2020, Whitmer’s second month in office.

How many of those jobs, at any given moment, came about thanks to the sitting governor? How many of those losses should be blamed on the governor? Credit-taking and the blame game are two sides of the same flawed coin.

Whitmer’s press office did not immediately return a request for comment on where the “25,000 jobs added” figure came from.

dickson@mackinac.org

Moving the state from the fuel tax to mileage-based user fees would be a better way to pay for Michigan’s roads and solve the problem of relying on gas and diesel taxes, according to a new study.

The novel idea of collecting revenue through mileage will become more appealing as increased fuel efficiency and use of electric vehicles reduce the amount states bring in through gas taxes. That’s according to Michigan’s Road Forward: Replacing the Fuel Tax with Mileage-Based User Fees, a report by Robert Poole Jr. and Christopher C. Douglas, released May 31 by the Mackinac Center for Public Policy and the Reason Foundation.

“The system Michigan has used for nearly a hundred years to pay for its roads—the per-gallon gas tax—is heading for a fall,” Poole says in an email. “Michigan’s roads are already in poor condition, and they will get much worse unless the state gets serious about coming up with a replacement and planning how to phase it in.”

The study estimates that by 2050, fuel tax revenue will give the state $1 billion to $2 billion less than what is needed to maintain roads. The shortfall will be caused by continued fuel efficiency improvements and a shift toward electric vehicles. Lawmakers increased the fuel tax in recent years and made sure it will increase along with inflation, but even that will be insufficient.

The study recommends charging motorists a per-mile fee rather than a per-gallon tax.

Mileage-based user fees seek to solve deficiencies of the current fuel tax. The tax cannot keep pace with future roadway needs and is not transparent in how it gets spent. Also, it applies equally to all drivers, regardless of the type of vehicle they drive or the roads they most frequently use.

“We need to raise the pool of revenue to maintain the roads. The roads have been in pretty lousy conditions, which I think is evidence that the current tax isn’t working,” says Douglas, a professor of economics at the University of Michigan-Flint and member of the Mackinac Center for Public Policy’s Board of Scholars. “We want to treat the roads like any other good or service, just like going to a baseball game or taking an airplane.”

A successful mileage-based fee must satisfy several conditions. It must charge different rates for different types of roads and vehicles. It also must reflect the cost of road maintenance and the damage a vehicle inflicts on a road. The fee needs to be transparent and subject to periodic increases when justified by increased operating and capital costs, but only through a public process. It also must be unaffected by changes to average fuel efficiency.

Poole and Douglas acknowledge that moving to a new system of funding road maintenance will not be easy.

“The biggest obstacle is that the general public is not aware of this looming crisis,” Poole says, referring to inadequate revenue for Michigan’s roads.

Concerns about driver privacy and lack of trust in public officials are two other barriers.

According to Poole, people fear that a mileage-based fee will result in Big Brother tracking them wherever they drive. They also worry that a fee will become an additional tax and not a replacement for the fuel tax.

About 23% of the federal Highway Trust Fund, which collects the federal portion of fuel taxes, is used for purposes other than roads. This, along with Michigan’s practice of imposing a sales tax on gas purchases in addition to the fuel excise tax, leads motorists to conclude that the fuel tax is just another tax to be paid, instead of a user fee.

“People have to trust that the price they pay will be used to maintain the roads rather than being diverted to other purposes,” Douglas says.

The report suggests that Michigan participate in a federally funded pilot project involving mileage fees. This will introduce a cross-section of the population to the idea of a mileage fee.

The pilot programs to date “have had a very positive impact for the thousand or two thousand who volunteer to participate in them,” Poole says.

By participating in pilot programs, motorists learn that there are alternative ways to report miles driven, and that their privacy can be protected. Most pilots programs send monthly statements to the participants, outlining what they paid in fuel taxes versus what they would have paid in a mileage fee.

According to Poole, some pilot programs have encouraged state legislators to learn alongside private citizens. They have also debunked the common fear that rural drivers will pay more in mileage fees because they drive longer distances. There is not a significant difference between urban and rural motorists in the number of miles driven. Rural motorists, however, tend to own vehicles that use more fuel per gallon

“These results have now been measured in a number of different states, and I am not aware of any cases where rural divers would pay more after a switch from per-gallon taxes to per-mile charges,” Poole says.