House Passes $450 Million Road Funding Plan
Monday, May 12, 2014
In what is being called a “first step” towards a full and comprehensive road funding plan, the Michigan House passed a 10-bill package that added an additional $450 million to the transportation budget. In addition to more revenue, several bills that deal with warranties, competitive bidding, vehicle registration fees and some trucking fees and fines were included in the package.
Everyone involved in the process, including Speaker Bolger, who spearheaded the proposal, admits that this is not a full solution, and it only solves about a quarter of the overall need to our transportation funding shortfall. The House-passed version is a good foundation to build upon. Several good discussions have occurred with Senate leadership to develop a plan to increase the overall funding to what our state needs.
Some of the other pieces of the package have to do with reforms and efficiencies, and we are keeping a close eye on everything. Additional language has been included to increase and extend the warranty programs within Michigan. More specifically, the House plan attempts to extend warranty programs to the local level. MITA understands the public desire for increased warranties in Michigan, however, contractors can only warrant those items for which they can control. MITA staff has worked hard to protect that philosophy.
Another item the House package addresses is extending competitive bidding in Michigan. Michigan contractors have existed in the competitive bidding market for decades and have saved taxpayers billions of dollars through the process. MITA staff is working hard to ensure that if the competitive bidding process is extended to more projects, and even include some maintenance on the local level, that private contractors are able to compete on a level playing field. Government agencies are not subject to sales tax on purchased construction equipment, state fuel taxes, personal property tax on equipment, local property taxes and Michigan business tax. In addition, they are not required to pay prevailing wage on construction projects. We support expanding the competitive bidding process as long as private companies are able to bid on a level playing field.
The House-passed transportation plan also included some changes to trucking fees and fines. The final House-passed version was a significant improvement to what was originally introduced, due to MITA efforts. Some increased fines and fees have been changed for overweight permits and violations, but more flexibility has also been added for misloads. Now, for a misload of 4,000 – 8,000 lbs. on a single axle on a truck still under their allowable gross weight, there is a maximum fine of $500 for up to 3 axles, rather than a pennies per pound calculation, which could result in much higher fines for that amount over axle weight.
All of these reform and efficiency ideas are to show the public that the state is using its resources to the best of its ability, but that we need additional money to sustain our state’s infrastructure. We are encouraged by the House action this week and view it as a real opportunity to get a full solution before the Legislature breaks for their summer recess. MITA staff will be working around the clock with the Senate to attempt to enhance the plan that passed in the House.
WRRDA Legislation Reaches Agreement in Conference Committee
The Water Resources Reform and Development Act (WRRDA) saw an agreement between the U.S. Senate Environment and Public Works Committee and the U.S. House Transportation and Infrastructure Committee.
The conference agreement is expected to be on the House and Senate Floors yet this month. Language is still being reviewed by congressional staff, but the House Conferees had proposed a two-year $4 billion Clean Water State Revolving Fund reauthorization package. This would represent a significant increase in funding for the SRF program, as compared to the two most recent federal fiscal years. It would also ensure that the revolving fund continues to be the primary source of clean water funding and that the new program would be a compliment to – and not a replacement for – the SRF program. This is a huge step forward for the underground industry here in Michigan.
For more information or questions, please do not hesitate to contact Lance Binoniemi, Vice President of Government Affairs, at email@example.com or call him at 517-347-8336.