Focus: Transportation Funding Crunch Is Felt

August 29, 2008
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GRAND RAPIDS —  So many Michigan roads are in such bad condition that the winter ahead is going to kill them.

So predicted Steve Warren, deputy director of the Kent County Road Commission, one of four experts who spoke at a transportation forum Monday sponsored by the Grand Rapids Area Chamber of Commerce. 

Companies want appropriate corridors to move products, and they’re also looking to locate in communities that have mass transit, Rep. Tom Pearce, R-Rockford, a member of the House Transportation Committee.

“I see Michigan at a crossroads right now in terms of state funding for transportation,” Pearce said. “We’re getting further and further behind in terms of infrastructure and road maintenance. Frontloading is leading us into crisis mode.”

Warren has been with the commission 30 years and said there has never been a time that he’s been more concerned about road infrastructure.

“What’s been happening over the last 10 years is that we’ve gotten to the point where we’ve let our roads erode because there is not enough money to preserve infrastructure,” Warren said. “It’s time to act.”

According to the Michigan Transportation Asset Management Council, Michigan’s roads are deteriorating faster than they can be maintained, with more miles in “poor” condition than in “good” condition. The council’s 2007 annual report indicates that in 2004, it would have cost $3.7 billion to bring all “poor and fair” rated roads up to “good” condition, but because of unchecked deterioration and increased costs, that cost grew to $6.6 billion by 2007.

Over the past 40 years Michigan has ranked 42nd or worse in per capita spending on state and local roads, according to the Citizens Advisory Committee’s Highway, Road and Bridge Subcommittee.

A 2007 study by the Reason Foundation indicated that Michigan has the eighth worst road system in the nation, with rural inter-conditions ranking fourth and urban interstate conditions ranking eighth.

Michigan has underfed its road infrastructure, and when roads can’t be maintained properly, they have to be torn up and reconstructed. However, it costs four to five times more to reconstruct a road than it does to provide regular maintenance, Warren noted.  Adding to the problem is the fact that over the last two years, fuel costs have tripled and the cost of asphalt has doubled.

“MDOT has already indicated it’s in a pickle because its bond obligation will be so great, it won’t have the money. MDOT said in 2010 it won’t be able to provide the state match for projects.”

Warren said Kent County should be investing $4 million to $5 million to rehabilitate roads but it can’t move ahead on rehab projects unless it receives federal monies.

Bob Morris, transportation policy coordinator for Southeast Michigan Council of Governments, said employers want airports, roads and mass transit but the problem is lack of funding and maintenance.

“With the challenges and lack of resources in this state, it’s amazing we can get anything done,” Morris commented.

Michigan has three problems, Morris said: deteriorating road conditions, increasing road congestion and the need for transit improvements and expansion. The state loses about $100 million per year in federal transit funding because the state can’t provide the 20 percent match on federal funding.

“Every $1 invested in transit brings in $6 in economic activity,” Morris stressed.

Morris offered a potential solution: Create a “self-help” local transportation fund. In order to set up such a fund, the Michigan Legislature would have to pass legislation that allows counties to place on a ballot a countywide funding option for significant road and transit projects. Under the “Business for Better Transportation Plan,” each county would decide whether it wanted to participate, and those that do would have to sell the program to voters. Morris said 37 states already allow local transportation funding options. If adopted, the legislation would give each county several fundraising options to choose from, such as adopting a 3 cent fuel tax, or adding a $25 fee to a general driver’s license, adopting a property transfer fee of up to 0.35 percent, or increasing vehicle registration fees up to 20 percent.

“Everything has to work together: If our network of transportation and transit is not working, businesses won’t come here,” said Peter Varga, CEO of The Rapid and chairman of the Grand Rapids Area Chamber of Commerce. Varga is a member of the state’s Transportation Funding Task Force, a group appointed by the governor to advise the Michigan Legislature and state government on the status of transportation investments and revenues and make recommendations on how those revenues could be used.

The task force has been meeting each month since early March and will continue to meet through October. Its preliminary findings are due Oct. 31, and Varga said the task force is on target to meet that deadline.

“The report is going to be significant,” Varga said. “I wonder who will champion it? I hope the business people will.”

The final report is due in April.

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