Snyder will offer plan to fix roads
Thursday, January 10, 2013
Gov. Rick Snyder is expected to unveil a funding plan to fix the state's roads and bridges in his third State of the State address next week.
Snyder earlier identified the need for $1.4 billion a year in additional road funding but didn't back a specific plan for raising that money. Various bills to address the issue were advanced in the Legislature in 2012, but none became law.
After signing an unrelated bill in Lansing on Tuesday, Snyder said he would offer a specific plan for roads in his annual address to a joint session of the Legislature next Wednesday.
It's always a challenge to pass bills to raise revenue in the Republican-controlled Legislature, and Snyder's road initiative comes at a time when Democrats feel uncooperative because of right-to-work legislation and other bills that were pushed through hastily during
the lame-duck session in December.
Increases to the gasoline tax, hikes to vehicle registration fees and diverting money from the state sales tax are among the ideas that have been discussed to raise money to repair and maintain the roads and bridges.
Snyder has proposed shifting the state gasoline tax from a per gallon levy to one based on the price of fuel. The shift would be intended to draw more state gasoline tax revenue as per-gallon costs increase.
That proposal would mean little to Livingston County, which is considered a "donor county," whose residents contribute more in transportation taxes than the amount of those taxes spent within the county, Livingston County Road Commission Managing Director Mike Craine said at the time of the proposal.
Craine said that trend would likely change little under that fuel taxation proposal.
Michigan motorists currently pay a 19-cents-per-gallon state gasoline tax and a 15-cents-per-gallon tax for diesel fuel. They also pay the 18.4-cents-per-gallon federal gasoline tax and 6 percent sales tax on each purchase.
State and local road funding have been hampered by less gasoline sales due to high prices and more hybrid vehicles on the road that only partially rely on gasoline.
Michigan's gasoline tax was last raised in 1997.
State Rep. Andy Schor, D-Lansing, was previously involved with road-funding issues with the Michigan Municipal League, and he has expressed interest in the issue as a freshman legislator.
Schor said he doesn't see how Michigan roads can be fixed without addressing the state gasoline tax in some fashion. He said House Speaker Jase Bolger, R-Marshall, on Wednesday identified road funding as a priority in his opening speech on the first day of the new Legislature.
Schor said the direction of the debate relies on Snyder's message next week.
"There's been a lot of short-term, Band-Aid solutions over the last many years," he said. "I'm kind of waiting to see what he says."
Michigan already imposes among the five highest state fuel taxes in the country once the 6 percent sales tax on fuel purchases is taken into account, said Jack McHugh, senior legislative analyst for the Midland-based Mackinac Center for Public Policy, a fiscally conservative think-tank.
McHugh suggested a solution that includes most, if not all, of the 6 percent state sales tax on gasoline be applied toward roads. Much of the sales tax paid at the pump goes toward education funding.
McHugh estimated the sales tax on gasoline purchases yields roughly $700 million annually that could be going into roads.
"No one disagrees that our roads would benefit from having more money spent on them, but we're already taxing the heck out of fuel, just $700 million right there is not going to roads," he said.
McHugh said Michigan could realize significant savings for roadwork by repealing the state's prevailing-wage law, which requires construction workers be paid guaranteed benefit levels on state projects.
He said around $150 million in annual savings could be realized by eliminating prevailing-wage rules, which he said would result in fewer state road projects being subject to federal prevailing-wage requirements.
"What's most likely to happen is nothing because you've got 148 legislators who in less than two years stand for a reelection" however, McHugh said.
Lance Binoniemi, vice president of government affairs for the Michigan Infrastructure & Transportation Association, representing road and bridge builders, said the state's infrastructure is losing about $3 million in value each day and the problem continues to worsen.
The estimate for the extra annual amount needed to preserve what Michigan has now was updated to $1.5 billion in 2012 and is now likely closer to $1.6 billion, Binoniemi said.
"There aren't a lot of new ideas or a lot of new solutions that can come about," he said.
His group and other interested groups are prepared to support whatever plan has the best chance to pass the Legislature, Binoniemi said.
Snyder won't be releasing details of his road-funding proposal before next week but will likely make a priority of the issue in his annual address, said Ken Silfven, Snyder's spokesman.
"It is, however, premature to get into details, but the need for action is clear. Michigan must invest in its deteriorating infrastructure," Silfven said.
"This is an issue that's been discussed for years but doesn't get resolved. That needs to change, not only for the quality of life for motorists, but for Michigan's economic growth and prosperity as well," he added.
Craine and Road Commission Deputy Director Steven Wasylk were not immediately available for comment Wednesday.