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Sunday, November 26, 2006   (0 Comments)
Posted by: Nancy Brown
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LANSING, Mich. — For the first time ever, the Michigan Department of Transportation five-year plan, released today, includes a funding gap of $130 million from 2007 to 2011.

“This is not good news for Michigan’s roads, which are already suffering from years of under-funding,” said Mike Nystrom, vice president of government and public relations at the Michigan Infrastructure and Transportation Association (MITA). “While it is not clear how this will affect upcoming projects, it is clear that funding is not keeping pace with the demands of our deteriorating system.”

State gas tax revenues, one of the main sources of state funding for the transportation system, were down in the first half of 2006 by over $13 million due to consumers conserving fuel because of skyrocketing gas prices earlier in the year. Michigan’s gas tax, which has not been increased since 1997 and is one of the lowest in the region, is set at 19 cents per gallon no matter what the price of fuel is at the pump. 

High prices for raw materials have also created unprecedented cost pressure on the transportation budget, Nystrom said. Dramatic increases in the costs of raw materials, particularly asphalt, which is a petroleum-based product, and steel, are driving factors in the funding gap.

“This announcement today only exacerbates a funding gap that had already been estimated at $700 million a year for the state managed system and at least $2 billion a year for local needs,” Nystrom said. “These funding shortfalls coupled with the dramatic increase in material prices and the continuing deterioration of our system means that Michigan is headed for a major transportation crisis.”

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