Balancing Act On Roads: 1-Time Funds Vs. Long-Term Answer
Thursday, February 20, 2014
If Lansing is on a slow tight-rope walk toward a long-term solution for Michigan's crumbling roads, some here are privately worrying this month that a burst of one-time money may not make the journey any easier.
That's the conundrum facing lawmakers as they work on the state's next budget and decide how to handle $971 million in surplus funds, much of it one-time money.
More and more, lawmakers -- and the public -- seem to agree that something drastic needs to be done to fix the roads. So putting a chunk of those surplus dollars into infrastructure would appear to make sense.
But it's not that easy when, according to estimates, the state needs somewhere between $1 billion and $2 billion in ongoing -- not one-time -- revenue for its roads annually into the future.
"How much is enough?" Rep. Andrew KANDREVAS (D-Southgate) replied this week when asked about sliding surplus funds into the transportation budget.
"The problem is it is not enough," the minority vice chair of the House Appropriations Transportation Subcommittee explained. "It's a one-time solution. We have a systemic problem that cannot be solved with a one-time solution."
Gov. Rick SNYDER's administration has been pushing for a long-term solution.
Last year, Snyder proposed a $4.574 billion transportation budget for Fiscal Year (FY) 2014 that included $1.2 billion that was to be raised through increases in gas taxes and vehicle registration taxes.
Those increases didn't happen, of course, and the budget turned out to be about $3.599 billion.
Earlier this month, Snyder unveiled his budget proposal for FY 2015. This time around he proposed $3.668 billion in funding for transportation -- a 1.9 percent overall increase.
While there was no revenue package in the plan, Snyder is still calling for legislative action to help the state's roads.
Snyder's budget does include a proposed $132.7 million increase in general fund dollars going to transportation. According to the House Fiscal Agency, in FY 2014, $121 million from the general fund went to the transportation budget. This time around, Snyder wants to see $254 million in general fund dollars go to roads.
The administration labeled the proposal a "down payment" on the bigger solution.
Still, many lawmakers have argued that in light of the problems facing the roadways, more of the state's surplus should be going to transportation.
But some in Lansing privately say they're worried that if the state spends more one-time money on its infrastructure now, it could delay the real, long-term solution.
Kirk STEUDLE, director of the Michigan Department of Transportation, testified earlier this week before a House subcommittee on Snyder's budget proposal.
Afterward, Steudle noted that the Governor proposed shifting a quarter billion dollars from the general fund to roads and bridges despite the fact that the transportation budget has usually been sustained by only user fees.
Asked if he would encourage lawmakers to make a larger investment in the budget, Steudle said the state now needs an estimated $1.3 billion in additional revenue for its roads annually.
"The only way you're going to get that is with some form of revenue adjustment, to the extent that that happens with the Legislature this year, that'd be great," Steudle said. "But at the same time, the issue is not going to go away."
According to Snyder's budget documents, ratings of state trunklines in good or fair condition are forecasted to continue to fall under current funding levels from 83 percent in 2014 to 48 percent in five years.
The problem is big, according to transportation interest groups, and it can't simply be solved with one-time surplus dollars -- although those dollars would at least help.
The attitude of groups including the Michigan Infrastructure and Transportation Association (MITA) and the County Road Association of Michigan (CRAM), is that the state needs to pursue a broad solution while also allotting a portion of the surplus funds for roads.
There's also money lingering in the state's Roads and Risks Reserve Fund that could come in handy immediately for locals as they battle one of the toughest winters in memory, said Denise DONOHUE, director of CRAM.
In road salt and other supplies, counties are blowing through maintenance budgets and won't have much money left for summer projects unless the state steps in to help, she added.
But any one-time funding this year would simply be a stopgap, according to Donohue.
"It is by no means close to the full answer," as she said.
Likewise, Lance BINONIEMI, vice president of governmental affairs for MITA, said any resources lawmakers can allocate for roads would be helpful. But they also need to keep pursuing a long-term answer.
"I think what you're seeing with the governor's recommendation, with the different chairs of committees on transportation, you're seeing a commitment from all of them," Binoniemi said today. "I think there's a vast recognition within the Legislature that something needs to be done.
"I think the debate is on what exactly that solution is."
Kandrevas seemed to agree, saying lawmakers need to do something more than a one-time money shift for the state's infrastructure.
As he said, "I think it's clear, looking at the Governor's proposed budget and what the director had to say … the department doesn't think just putting a little bit of money from the general fund into it a year at a time is a viable long-term solution."