The House Committee on Local Government and Urban Affairs recently approved legislative changes (HB 4572-4573) intended to stimulate greater and quicker use of the $1 billion in sewer bonds approved by voters in 2002. Only $1.5 million of the first $100 million in bonds have actually been issued to date. One of the many reasons is that the initial cost of developing plans and engineering is too costly for some local governments in light of tighter economic times.
These bills would set aside 10% of the remaining bond authority, or $90 million over the next nine years, to be used as grants to pay for these costs. This change would offer additional help for those communities facing the enormous costs of upgrading their sewer systems, but would also require these municipalities to repay the grants if they did not meet timeframes to actually begin and complete construction.
MITA is in support of this legislation because it could mean projects may start sooner and thus create work and jobs for the underground construction industry.
Future bulletin updates will be forthcoming on the progress of these bills.
BUDGET BALANCING STEALS $10 MILLION MORE FROM TRANSPORTATION
In an attempt to balance the current years (2004 & 2005) state budget, the House of Representatives recently passed a “reverse-supplemental” which takes $10 million from the State Transportation Budget and passes it over to the Michigan Department of State (Secretary of State). Although transportation funds are constitutionally protected in Michigan, the legislative justification for this move (other than keeping a balanced budget) is reimbursement for certain services that the Secretary of State performs for the Department of Transportation.
However, this $10 million was over and above monies that had already been allocated from the MDOT budget to the Secretary of State earlier in the original budget. MITA lobbied this issue very hard and helped to force a House vote that was as close as it possibly could be without failing, and then pushing the legislature hard enough to only come up with the minimum number of votes needed to pass the legislation onto the Senate. MITA has helped to coordinate, along with other road interest groups, a concerted grassroots lobbying effort that will take place on the Senate side immediately. (see MITA press release at www.mi-ita.com)
Our focused message will be that with the state of our road and transportation system here in Michigan, no money should be taken from MDOT’s budget at this time. In the end, however, this reverse-supplemental is part of an overall agreement between Governor Granholm, Speaker of the House Craig DeRoche and Senate Majority Leader Ken Sikkema. The likely success of stopping this money transfer is minimal.
The positive side of this debate has highlighted the fact that inter-departmental grants rob the transportation budget of significant monies (nearly $45 million) in the proposed 2005 – 2006 budget. MITA will be focusing its efforts in this area in an effort to make sure to take advantage of any opportunity to keep these dollars in the DOT budget and thus going into Michigan’s roads and bridges. A couple of messages that seem to be hitting home with the legislature already include:
That the $45 million in IDG’s is equal to a four cent diesel tax increase of which the legislature is unwilling to consider (see related story).
The fact that no other departments actually give grants back to MDOT for use of the roadway system.
The fact that the legislature is questioning MDOT so heavily on their use of bonding and their debt levels, yet through the legislative budget process they are forcing MDOT to give away millions of dollars.
Lastly and probably most obvious is the fact that our roads here in Michigan are in terrible shape and could use as much funding as possible.
DIESEL PARITY BILL ONCE AGAIN INTRODUCED
Senator Mike Switalski has once again introduced Senate Bill 291-292, which would increase diesel tax by four cents in Michigan, thus creating parity between the diesel and the regular fuel user fee.
Once again, however, it seems as though the legislature is unwilling to consider this package of bills. At this point, MITA is supportive of not moving these bills due to the opinion that this package of bills should be part of a larger comprehensive package of bills that would significantly increase road funding here in Michigan.
MITA is hopeful that these bills along with other considerations would be combined into a package of bills in the future that would increase numerous fees and thus allow for significantly increased revenues for our state’s DOT and local agency road systems.
Another set of bills has been reportedly requested, which would take the sales tax that is collected on fuel purchases and put it into road funding. No actual bill number has been initiated at this time as the language is just now being developed. However, MITA’s position would be similar to the diesel bills in that although supportive, it should ultimately be part of a comprehensive package.
MITA CONTINUES TO PUSH CONGRESS AS THEY RETURN FROM SPRING BREAK
MITA, along with the rest of the Michigan Transportation Team (MTT), continues to push Congress to return to Michigan its fair share of federal road dollars. The annual Washington D.C. Fly-In trip is slated for April 26-28th, where nearly 40 industry leaders from Michigan will be visiting Capitol Hill in an effort to persuade Congress to send Michigan a greater return on its road investment from Washington.
Although questionable there are hopes that the Senate will get their part of the business done expeditiously and thus bring together a Conference Committee that could get reauthorization completed by the May 31, 2005 expiration date. However, another extension may be on the horizon…stay tuned.
Watch for future bulletin updates on this issue as well as the other issues mentioned in this bulletin. Please contact Mike Nystrom at the MITA office 517-347-8336 with any concerns or comments.