Governor Announces Transportation Budget, Talks Investment in Infrastructure

This week the Governor announced his budget which includes an increase in transportation funding. As a result of higher fuel taxes and registration fees that will take affect on January 1, 2017, the Governor is projecting $533 million in addition revenue for roads, bridges, transit, and aviation across Michigan. Cities and villages will receive approximately $100 million of the new revenue generated.

Unfortunately the Governors is no longer adding additional General Fund money to the transportation budget resulting in a net impact to cities and villages that will be less than $50 million. This increase represents new constitutionally protected revenue that will continue on an annual basis but it falls far short of what is truly needed.

Additionally transit will see bus capital increase by $19 million and local bus operating increase by $12.6 million. Rail will see a $15.8 million increase and aviation and airport improvement programs will receive a $13.5 increase.

The Governor also announced an additional $195 million to combat the ongoing crisis in Flint.

  • $30 million will be used to give Flint residents rebates on lead-tainted water they didn’t feel comfortable drinking or using.
  • $63 million for treating children with high blood levels expanding preschool programs putting nurses in the schools, abating Flint homes of lead, making epidemiologists available to analyze blood lead levels and paying for in-home behavioral services for children.
  • $37 million is going toward making the Flint municipal water safe to drink. That means more water samples, inspections and replacing of filters in schools, studying what needs to be going on with Flint’s infrastructure and staying connected with Detroit until the end of 2016, when the city is scheduled to hook up to the new Karegnondi Water Authority (KWA).
  • $15 million will go towards food and nutrition programs for Flint’s children, including a summer meal program, mobile food banks and food inspections.
  • $50 million would be set in reserve for any future needs in Flint.

Finally the Governor proposed $165 million in ongoing funding to create the Michigan Infrastructure Fund that will be used to fund statewide infrastructure needs. There are limited details but the Governor is proposing that the investments will be based on a prioritization of needs. Categories for investment could include replacement of known high-risk lead and copper services lines, infrastructure upgrades while repairing roads or other utilities and the development of asset management plans.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

New Federal Transportation Bill, FAST Act, Becomes Law

President Obama signed the FAST (Fixing America’s Surface Transportation) Act yesterday, making the first long term transportation bill in a decade official. There are some big wins for local governments within the new law, which is worth approximately $305 billion. A good, comprehensive 13 page summary of the law can be found here.

The biggest win for local communities, quite simply, is that it is a 5 year arrangement and local leaders will not have to wonder what will happen every six months under more extensions. The League had been advocating first and foremost for a bill that expands beyond the next fiscal year to enable more long-term planning for transportation projects. Specifically, there are many other significant victories being highlighted in the bill, which spans 1300 pages.

The Surface Transportation Program is now the Surface Transportation Block Grant Program and increases the amount allocated to local leaders from 50% to 55% over the length of the bill and gives locals greater flexibility in how the funds are spent.

The Surface Transportation Block Grant Program would now house the Transportation Alternatives Program, and is proposed to be increased from $835 million to $850 million. And the bill gives Metropolitan Planning Organizations additional flexibility in how to spend their funds.

Transit Oriented Development would be eligible for the TIFIA program and the minimum project size threshold would be lowered to $10 million, expanding the program significantly for smaller projects.

The Michigan delegation was mostly supportive with both Senators voting yes and twelve of the fourteen Representatives voting for the bill as well. Congressmen Amash and Huizenga were the two no votes.

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at sminnick@mml.org or 517-908-0301.

Congress Poised to Pass Long-Term Transportation Package This Week

For the first time in ten years, Congress is on the verge of passing a long-term transportation package and there are some big wins for local governments within the new deal. The committee of House and Senate negotiators have agreed to the new bill worth approximately $305 billion, entitled the FAST Act (Fixing America’s Surface Transportation), and both Chambers are expected to pass it by the deadline of this Friday, December 4th. The biggest win for local communities, quite simply, is that it is a 5 year arrangement and local leaders will not have to wonder what will happen every six months under more extensions. The League had been advocating first and foremost for a bill that expands beyond the next fiscal year to enable more long-term planning for transportation projects. Specifically, there are many other significant victories being highlighted in the bill, which spans 1300 pages.

The Surface Transportation Program is now the Surface Transportation Block Grant Program and increases the amount allocated to local leaders from 50% to 55% over the length of the bill and gives locals greater flexibility in how the funds are spent.

The Surface Transportation Block Grant Program would now house the Transportation Alternatives Program, and is proposed to be increased from $835 million to $850 million. And the bill gives Metropolitan Planning Organizations additional flexibility in how to spend their funds.

Transit Oriented Development would be eligible for the TIFIA program and the minimum project size threshold would be lowered to $10 million, expanding the program significantly for smaller projects.

The bill is being paid for by a series of sources, not including any changes to the federal gas tax. Some of the sources include the Federal Reserve surplus account, selling a portion of the Strategic Petroleum Reserve and cutting the dividend the Federal Reserve pays to some member banks.

We will notify you as soon as the bill has cleared both the House and Senate later this week. We’ll know more details of the bill in the coming days, but the changes identified so far show significant improvement for local governments and their support for transportation infrastructure by the federal government. We’re pleased after all these years to be on the verge of such a victory!

Summer Minnick is the Director of External Relations and Federal Affairs. She can be reached at 517-908-0301 or sminnick@mml.org.

Legislature Considering Bills That Would Remove Local Control Over Setting Speed Limits

House Transportation and Infrastructure Committee is considering five bills, HB 4423, 4424, 4425, 4426, and 4427, that would dramatically impact the ability of local units to set safe and context sensitive speed limits within their municipal boundaries.

HB 4425 would require that speed limits be set at the 85th percentile of speed. Fundamentally, we believe that all users of the roadway should be taken into account when setting a speed limit. The 85th speed study within this legislation is set up to look only at the free-flow of traffic, under ideal conditions, and on the fastest portion of the roadway. We believe this completely neglects taking the context of the roadway, the surrounding environment, pedestrian traffic (walking or biking), transit, or the views and needs of the community into account.

When we look at the 85th percentile of speed, it should be a diagnosis not a prescription. It can be a useful and rational tool to help understand speeds on on local streets but should not be looked at as the only solution. Other states incorporate a broad number of mitigation criteria that allow flexibility to lower speed limits below the 85th percentile of speed. Too often we talk just about increasing the speed to the 85th percentile for safety reasons but rarely do we talk about how we could reduce the 85th percentile so everyone using the roadway is safer.

Each community is best suited to understand local conditions that place children, the disabled, seniors and other vulnerable roadway users in harm’s way, and we are opposed to any attempt that diminishes our communities efforts and ability to provide a safe and inviting environment.

We encourage you to reach out to your legislator and ask that they do not take away local control over our ability to set speed limits. Additionally you may choose to adopt a resolution such as Grand Haven and Grandville have done and share that with your legislator.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

 

Roads Deal Passes Michigan Legislature, Governor Snyder Prepares to Sign

A school bus travels over bumpy roads. Vote yes for safe roads on May 5.

A school bus travels over bumpy roads.

Late last night the Michigan Legislature narrowly cobbled together the necessary votes to send a road funding package to the Governor Snyder’s desk for signature.

Over the past two-plus years the Michigan Municipal League has consistently called for a long-term sustainable solution that relies heavily on a significant amount of dedicated funding for transportation and doesn’t leave future state and local budgets hanging in the balance. This plan falls far short of that and there simply isn’t enough real revenue for roads in this package.

It’s an over-statement to say that a $1.2 billion plan with $600 million in new revenue and $600 million in General Fund dollars will fix Michigan’s crumbling infrastructure. This is especially true given that two-thirds of the new revenue will simply replace General Fund money already budgeted for roads in the current fiscal year and the plan doesn’t fully phase in for almost a decade.

The framework of the plan includes 7.3 cents gas tax increase and a 20 percent increase in registration fees. Those increases don’t go into affect until January 1, 2017, meaning no new money will be infused into the system for 14 more months. Gas and diesel taxes will be indexed to inflation but not until 2022.

Additionally, the $600 million in General Fund revenue will be phased-in over three years beginning in FY 19 and relies on future Legislatures – some of whom aren’t even elected yet – to appropriate those General Fund dollars to uphold the promises of this current Legislature. History has proven that similar earmarks of this nature have gone unfulfilled.

Plan Details:

HB 4736  increases passenger and commercial vehicle registrations fess by 20 percent per vehicle beginning January 1, 2017. The bill provides for additional increases for plug-in hybrid and electric vehicle registrations. These changes result in a $200 million revenue increase for transportation.

•  HB 4738, HB 4614, and HB 4616, provide for gas and diesel tax increases to 26.3 cents, an increase of 7.3 cents per gallon beginning on January 1, 2017. The bills also implement diesel parity, institute a process for taxing alternative fuels, and tie the fuel tax rate to inflation beginning in 2022. These changes result in a $400 million revenue increase for transportation.

HB 4370 dedicates $600 million of income tax revenue to transportation phased in over three years, $150 million in FY 19, $325 million in FY 20 and $600 million in FY 21. will This bill also provides $200 million in tax relief by expanding the Homestead Property Tax Credit. According to both the House and Senate Fiscal Agencies that when fully phased-in this will reduce the state General Fund by more that $800 million, or roughly 7 percent.

HB 4737 requires MDOT and local road agencies to secure warranties, where possible, for construction and preservation projects over two million dollars and mandates new reporting requirements for MDOT and local road agencies on those warranties.

HB 4737 also creates a “Roads Innovation Task Force” that will form no later than December 1, 2015 and prepare a report no later than March 1, 2016. The Roads Innovation Task Force will evaluate road materials and construction materials that will allow MDOT to build roads that could last at least 50 years, will focus on materials and processes that may cost more upfront but produce life-cycle construction and maintenance savings, and concentrates on longer-term time frames that seek to maximize value of the taxpayers of this state

Additionally, HB 4737 creates a Roads Innovation Fund. This fund will collect the first $100 million each fiscal year starting in 2016-17 from fuel taxes and every year thereafter. The funds can only be released once the House and Senate approve a one-time concurrent resolution approving the report done by the Roads Innovation Task Force. Those funds shall be appropriated only for the use of specific higher quality, longer life cycle road construction purposes. Once the concurrent resolution is approved the fund shall no longer annually receive the allocation.

SB 414 creates an automatic rollback of the income tax. The rollback occurs when General Fund growth exceeds the rate of inflation plus 1.425%. The first rollback could not begin until January 1, 2023.

HB 4610 allows townships contributing 50% or more to a road project to require an RFP for pavement projects over $50,000 and gravel projects over $25,000.

HB 4611 requires an RFP process for all projects over $100,000 for MDOT. Local road agencies must do RFPs for all projects, excluding routine maintenance, over $100,000, unless the local road agency affirmatively finds that they can do it themselves for less.

The League believes this plan is overly reliant on existing tax dollars and very likely establishes a foundation for potential cuts to local police and fire protection, higher education, economic development and our ability to attract and retain a talented workforce. It fails to address the key principles for which we consistently advocated – a long-term sustainable solution that invests in our road network, protection of essential services, and fiscal responsibility in regards to future state and local government budgets.

View a League media statement on the roads plan passed by the Legislature.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

House Passes $1.2 Billion Road Funding Plan that Relies on $600 Million in General Fund Revenue

A fire truck makes an emergency run over crumbling roads in Macomb County.

A fire truck makes an emergency run over crumbling roads in Macomb County.

Late last night the Michigan House of Representative passed a plan that would raise $1.2 billion to fix Michigan’s infrastructure but relies heavily on state general fund revenue to do so. The plan could have a significant negative impact on the essential services that communities provide and Michigan Municipal League has consistently expressed our concern with any road funding solution that would jeopardize the long-term fiscal sustainability of this state and its communities.

This plan contains $600 million in new revenue and $600 million in general fund revenue. The new revenue would be generated by increasing gas taxes by 3.3 cents and registration fees by 40%. The plan does not identify where the existing revenue will come from. The following bills were included in the House passed plan.

HB 4370 provides $200 million in tax relief by expanding the Homestead Property Tax Credit and also dedicates $600 million of income tax revenue to transportation. Based on current revenue and expenditure projections, this statutory dedication of General Funds would not result in a year end budget deficit greater than $60 million in the next five years.

HB 4736  increases passenger and commercial vehicle registrations an average of $55 (40%) per vehicle. Additionally, the bill provides for plug-in hybrid ($30) and electric ($100) vehicle registration fee increases resulting in $400 million revenue increase for transportation.

HB 4614, HB 4616, and HB 4738 provide for gas/diesel tax increases to 22.3 cents (increase of 3.3 cents) per gallon by 2019. The bills also implement diesel parity, institute a process for taxing alternative fuels, and tie the fuel tax rate to inflation resulting in $200 million revenue increase for transportation.

HB 4610 allows townships contributing 50% or more to a road project to require an RFP for pavement projects over $50,000 and gravel projects over $25,000.

HB 4611 requires an RFP process for all projects over $100,000 for MDOT. Local road agencies must do RFPs for all projects, excluding routine maintenance, over $100,000, unless the local road agency affirmatively finds that they can do it themselves for less.

HB 4737 requires MDOT and local road agencies to secure warranties, where possible, for construction and preservation projects over two million dollars.

SB 414 creates an automatic rollback of the income tax rate equal to the amount General Fund revenue exceeds the rate of inflation annually. The rollback begins on January 1, 2019 and the tax cut level will be dictated by annual General Fund levels and will vary from year to year.

The League strongly encourages Governor Snyder and quadrant leaders to restart their conversation and come up with a road funding plan that does not jeopardize the essential services that Michigan citizens rely on, such as police and fire protection, schools and public transit.

Additionally, the League encourage you to reach out to your individual Senator and ask them to pass a long-tern fiscally sustainable solution that relies more on new revenue and less on general fund revenue , does not jeopardizes future state budgets and does not  negatively impact the essential services communities provide.

View a League media statement on the House roads plan.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

 

After Serious Negotiations It Is Back To The Drawing Board On Transportation Funding

Legislators spent the majority of the week once again trying to find a way to invest more money in Michigan’s roads. Talks began with the most serious negotiations of the summer and at one point there was some belief that a deal was close. At the end of the day though a final compromise was unable to be reached and the Governor and legislative leaders are back to the drawing board.

The potential deal was a plan based around increasing road funding by $1.2 billion, with $600 million coming from new revenue and $600 coming from existing revenue. The new revenue would come from a combination of gas taxes and registration fee increases. The $600 million in cuts to existing revenue remained undefined and was one of the major sticking points with many legislators.

Talks have already begun on finding a way to solve this problem but further action will not take place until after Labor Day at the earliest. The League has continued to voice our concerns over the use of a significant amount of unidentified existing revenue, the need to invest in transit, and that any solution should not put an unnecessary amount of new reporting requirements on our members

The League will be working hard to ensure our voice is heard as we move closer to a deal. We will continue to update you on any new details and how you can engage members of the Legislature in the coming weeks.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Save the Date: Transportation Asset Management Conference

The Transportation Asset Management Council will we holding there Fall Conference on October 15, in Marquette. The theme of this years conference will be investing in our future with data driven solutions.

For more information, contact Frank Kelley, Asset Management Coordinator at 517-373-2111 or kelleyf@michigan.gov, or visit us on the Web at: www.michigan.gov/tamc.

To register, contact the Michigan Local Technical Assistance Program (LTAP) at the Center for Technology & Training at 906-487-2102 or ctt@mtu.edu.

For a copy of the Save the Date flyer please click on the following link. 2015 FALL TAMC Save the Date

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Transportation Asset Management Council Policy for Collection on Roadway Condition Data on (Paved) Non-Federal Aid Eligible Roads and Streets

Since 2009, the Transportation Asset Management Council (TAMC) has been working with local road agencies to collect PASER data on the paved non-federal aid system. In 2009, the TAMC began a policy to annually budget to reimburse agencies for data collection of PASER data on up to one third of the State’s paved non-federal aid road system. Many local road agencies have taken part in this reimbursement program to the extent funds allowed. The TAMC is also aware of many local road agencies that periodically collect PASER data on the paved non-federal aid system without reimbursement from the TAMC.

The TAMC would like to request submission of paved non-federal aid PASER data that agencies may have collected for their own purposes. If a local road agency is currently collecting paved non-federal aid PASER data without TAMC reimbursement; the TAMC would like to kindly request submission of that data annually. Your submission of paved non-federal aid data, with or without reimbursement, allows the TAMC to have a better indication as to the status of the State’s paved non-federal aid road system. Data submitted before December 15th of each year can be included in the TAMC Annual Report.

For more information please click the following link. TAMC – Paved Non-Federal Aid

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

Senate Passes Road Plan with $700 million in Unspecified General Fund Cuts

Last night the Senate voted out a road funding plan that could ultimately raise $1.5 billion for roads, with two of the main pieces of legislation in the plan coming to a tie on the chamber floor.

The plan generates roughly $822 million by increasing the gas tax 15 cents and $700 million from unspecified General Fund budget cuts.

Eight bills — SB 0414, HB 4610, HB 4611, HB 4612, HB 4613, HB 4614, HB 4615 and HB 4616 — were passed through the Senate, but two of the main pieces of legislation were only moved after Lt. Gov. Brian CALLEY broke the tie.

Under HB 4615, the gas tax would go up 19 cents to 23 cents on Oct. 1, 2015; to 27 cents on Jan. 1, 2016, and 34 cents on Jan. 1, 2017, raising $475 million more for the roads in Fiscal Year (FY) 2016, $733 million in FY 2017 and $822.1 million in FY 2018, according the Senate Fiscal Agency (SFA).

The also also creates a lock box directing seven cents of the 15-cent gas tax increase to a fund controlled by the Department of Treasury that could only be spent after approval is given by joint resolutions of the House and Senate.

Under SB 414, a $350 million General Fund allocation would be made toward roads in Fiscal Year (FY) 2017 and a $700 million special roads allocation that would take place going forward until FY 2033.

The bill also includes a mechanism that would roll back the state’s income tax if General Fund revenue exceeds the rate of inflation. Every .1 percent that is rolled back from the state’s 4.25 percent income tax would equate to an additional $230 million reduction in the the state’s General Fund.

HB 4613 would require warranties, where possible, on all road projects over one million dollars. Additionally, this bill contain 23 new reporting requirements that local units of government must provide to MDOT.

The bottom line is that this plan does not provide a long-term sustainable solution to address Michigan’s deteriorating infrastructure. Additional earmarks from the General Fund and only allowing the General Fund to grow by inflation could severely affect the ability of the state to prioritize investment in communities that desperately need it. It could result in future cuts to revenue sharing, K-12, higher education, community colleges, economic development, PILT, fire protection grants, or state police.

The League will be working hard to ensure our voice is heard on the potential long-term negative impacts this proposal could have on our communities. We will continue to update you on the advancement of this proposal and how you can engage members of the Legislature in the coming days.

John LaMacchia is a Legislative Associate for the League handling transportation, infrastructure, and energy issues. He can be reached at jlamacchia@mml.org or 517-908-0303.