Finding dollars for roads

Alex Doty • Jul 21, 2015 at 12:16 PM

The forum was fueled by talk in Lansing on how to best raise the additional $1.6 billion legislators say is needed to adequately maintain Michigan’s roads.

“Adequate means 80 percent good or better," said state Sen. Arlan Meekhof, R-West Olive. "We are starting to trend below that right now. If we don’t do repairs now, it costs more down the road.”

The state’s transportation budget is currently at about $3.46 billion. Of that, nearly two-thirds comes from fuel taxes and registration fees, while the remaining comes from federal funding.

There is currently a litany of ideas in Lansing on how to fix Michigan’s road fund woes.

One set of ideas introduced by Gov. Rick Snyder would double the gas tax from 19 cents a gallon to an equivalent wholesale tax of 37 cents per gallon. This tax would rise or fall no more than one penny each year, up to a ceiling of 50 cents.

It would also hike vehicle registration fees by 80 percent, while commercial trucks and tractors would pay 45 percent more.

“The last time we raised the gas tax was in 1997,” Meekhof said. “That was a 4-cent increase per gallon.”

Michigan’s gasoline tax is currently at 19 cents per gallon.

Left out of that 1997 increase is an inflation factor. If this is factored in, the state would have $1.2 billion needed to maintain its roads, Meekhof said.

“The current formula does not support what we are doing going forward,” the senator said.

Another idea is a constitutional amendment to increase the state’s sales tax to 8 percent and eliminate the fuel tax. Alternatively, the sales tax could be increased to 7.5 percent and fuel taxes would be left as-is.

State Rep. Amanda Price, R-Park Township, said that there should also be a look at other fuels being used, and how those might be taxable.

“A lot of fleets are converting to liquid natural gas," she said. "We don’t tax liquid natural gas right now. That’s another chunk of revenue we’re not collecting.”

Legislators say other options include a reallocation of funds for transportation. But they also say that's not as easy as it sounds. Out of the state’s $50 billion spending budget, only about 20 percent is left for reallocation into other funds.

“There’s about $9 billion that isn’t tied to something else that we can spend,” Meekhof said, noting that there are many mandates that are currently underfunded or unfunded as it is.

Tax increases and reallocations aside, state legislators are looking at other options, such as alternative construction methods and ways to raise funds, highway naming rights, bridge billboard advertisements, and farming or timbering in highway medians.

“If we don’t want to raise taxes, there’s some other things we have to look at,” Meekhof said.

Meekhof expects whatever choice is made to include a little of everything.

“It’s as if (the governor) put the most onerous thing on the board so we could come up with something better,” he said.

After the elected officials laid out their ideas, local residents offered their thoughts.

Steve Daitch of Grand Haven said he enjoyed Tuesday’s forum, but didn’t agree with raising the fuel tax.

“There’s a general understanding that we need good roads,” he said.

What isn’t clear, Daitch said, is the way to fund it.

“I think in terms of fairness, I’d like a tax per mile used,” he said. “I think that a per-mile tax would make a lot more sense.”

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