Whitmer’s Tax-And-Borrow Missteps Halted Road Repair Progress

The condition of Michigan’s roads is better than had been projected for 2021. They would be in even better shape if Gov. Gretchen Whitmer hadn’t cut road spending after the Legislature refused to enact a major gas tax hike she had proposed. The governor also authorized $800 million in road repair debt, repayment of which will reduce money available for future repairs.

“Lawmakers had gotten close to the point where roads are put back together faster than they fall apart,” said James Hohman, director of fiscal policy at Mackinac Center for Public Policy. “But the governor’s insistence that the last step be made with a tax hike suspended the progress made to improve road conditions.”

Meanwhile, Michigan’s place in national rankings for highway performance and cost-effectiveness had advanced from 30th in the nation in 2019 to 24th in 2020, according to the Reason Foundation’s Annual Highway Report.

Whitmer had insisted that additional road funding come through a 45-cent per gallon gas tax increase, a proposal so unpopular that no member of her own party introduced it as a bill in the state House or Senate.

A much smaller gas tax hike and vehicle registration tax increase enacted in 2015 had put the state on a path to spending $3.6 billion on road repairs in 2018-19, up from $2.0 billion in 2010-2011.

Hohman said the state still wasn’t fixing road faster than they deteriorate, but it was close.

In 2011, a measure of state and local road quality found 65% were in good or fair shape. But without more resources, transportation officials expected a gradual decline to just 45%. That level of decline did not happen, though, because lawmakers found more resources — just not enough to halt the rate of deterioration entirely.

At the current level of annual spending, the quality of Michigan’s roads is expected to stay about the same.

During Whitmer’s time in office, annual state spending on road repairs is down $43 million. The $800 million for road repairs the governor used her authority to borrow will generate some $565 million in interest expenses going forward, representing money that will go to government bond holders rather than concrete and asphalt.

Existing laws give Whitmer the authority add an additional $2.7 billion in road debt.

Despite the short-term boost provided by borrowed road repair money, projections for 2032 indicate Michigan roads will deteriorate to the point where 46% are deemed to be in “poor” condition, according to Michigan Transportation Asset Management Council.