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.

 

Senate Republican’s Release Road Funding Plan, Vote It Out of Committee

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 yesterday afternoon the Senate Republican’s released their road funding plan and immediately voted it out of committee on a party line vote. The plan consists of a mix of new revenue and rededicating General Fund money for a total of approximately $1.5 billion in funding for roads and bridges when fully implemented.

Beginning October 1, 2015, this plan would increase the gas tax by 5 cents. It would increase an additional 5 cents on January 1, 2016 and January 1, 2017, for a total of a 15 cent increase. Tax rates on diesel would be adjusted so they are equal to the tax paid on gas by the end of that three year period. Beginning in 2018 gas and diesel taxes would be tied to inflation. This will generate roughly $820 million in new road dollars that will flow through the full Act 51 funding formula, providing an increase to the Comprehensive Transportation Fund which supports public transportation, rail, and ports. Beginning in 2033 the gas tax would be eliminated.

The plan earmarks $350 million of existing income tax revenue in 2016 and $700 million each year from 2017 to 2032 solely for roads and bridges. These redirected dollars would circumvent the full Act 51 formula, bypassing the Comprehensive Transportation Fund (CTF).

State General Fund spending would be capped at current spending levels and only allowed to grow by the rate of inflation. Any growth over inflation will result in a reduction to the income tax rate by the same amount. There is no identified floor on the rollback so hypothetically income taxes could be rolled all the way back to zero.

Similar to the House plan this proposal would eliminate the Earned Income Tax Credit, require competitive bidding on all MDOT and local road projects over $100,000, require MDOT and local road agencies to secure warranties for projects over $1 million, and allow townships contributing greater than 50% to a road project over $50,000 to require competitive bidding. MDOT must also create a 50 Year Roads Task Force where their goal will be find a way to build roads that last at least 50 years and to be able to build them for half the cost.

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.

We would encourage all of our members to reach out to their State Senator and explain that we are thankful that this proposal has new revenue included but this proposal will severely limit the flexibility of the state’s General Fund. The lack of flexibility could have a long-term negative affect on communities. Please ask that they do not pass this legislation this without significant changes that will protect the state’s ability to invest much needed resources into communities.

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 Commerce Committee Passes Bill Preempting Local Control of Transportation Network Companies

HB 4637 would provide statewide regulations for a Transportation Network Company (TNC). The most recognizable TNC operating in Michigan today is Uber. This bill would preempt local control of a TNC but it does allow for locals to enforce provisions of the statewide regulation. A few communities in Michigan have already negotiated contracts with and regulate TNCs. This would make those contracts null and void.

The statewide regulation would provide uniform standards for insurance, vehicle safety inspections, background checks, and driving records. Although there was opposition from many groups the bill was passed out of committee. The League is opposed to this bill and has testified in opposition.

We anticipate this bill seeing floor action before the Legislature breaks for the summer at the end of this week. On the other side of the Capitol, the Senate has been working on legislation, SB 184, that would continue to protect local control and allow communities to regulate TNCs. The League is support of the Senate bill and hopes to fine a resolution to this issue in the near future.

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 Road Funding Plan Sent to the Senate

With almost entirely Republican support, a twelve bill package that represents Speaker Cotter’s transportation plan was passed out of the House today and sent to the Senate. The plan would use existing revenue and prioritize future dollars to provide an additional $1.1 billion in funding for roads and bridges and was broken down into the following five categories.

$792 million from the General Fund
$135 million from Reprioritizing Restricted Funds
$117 million from Tax Fairness
$38 Million in New Revenue
Reforms and Efficiencies

General Fund: The $792 million the Speaker proposed will come from prioritizing general fund spending and assumes cuts can be avoided due to expected future growth in revenues. This is phased in over 4 years with $442 million being dedicated in FY 16, $492 million in FY 17, $617 million in FY 18, and $792 million in FY 19. After FY 19 the number will grow by the rate of inflation or 5%, whichever is less.

Reprioritizing Restricted Funds: Of the $135 million, $75 million will come from tobacco settlement dollars currently in the 21st Century Jobs Fund, $60 million from the states tribal gaming compact. These bills gut MEDC funding and potentially many of the programs our members have benefited from.

Tax Fairness: The House eliminated the Earned Income Tax Credit resulting in a $117 million for roads.

New Revenue: $38 million will come from diesel parody (raises tax on diesel to 19 cents and ties it to inflation) and increased fees on electric and hybrid vehicles ($30 increase for hybrids and $100 increase for electric).

Reforms and Efficiencies: The House-passed bills will require competitive bidding on all MDOT and local road projects over $100,000, require MDOT and local road agencies to secure warranties for projects over $2 million, and allow townships contributing greater than 50% to a road project over $50,000 to require competitive bidding.

Other highlights: The current gas tax will remain at 19 cents but will be tied to inflation. All of the new money will be sent to MDOT, counties, cities and villages resulting in no increase for the comprehensive transportation fund.

The proposed package of bills has less than $40 million in new revenue. It neglects to make a much needed investment in transit and jeopardizes economic development funding many of our communities benefit from. This plan also impacts the long-term certainty our communities need to plan, which is one of the key factors to our opposition.

The League firmly believes we must find a sustainable long-term solution to the problem that includes new revenue that is dedicated to the entire transportation system. These bills do not do that. We have offered testimony on multiple occasions explaining our dissatisfaction with this proposal. Our advocacy efforts will continue to focus on a solution that includes new revenue and makes much needed investments in public transit.

We look forward to working with the Senate and are hopeful that this package can be improved significantly.

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 Commerce Committee Hears Testimony on Bill Requiring Statewide Regulation of Transportation Network Companies

HB 4637 would provide statewide regulations for Transportation Network Companies (TNC). The most recognizable TNC operating in Michigan today is Uber. This bill would preempt local control of a TNC but it does allow for locals to enforce provisions of the statewide regulation. A few communities in Michigan have already negotiated contracts with and regulate TNCs. This would make those contracts null and void.

The statewide regulation would provide uniform standards for insurance, vehicle safety inspections, background checks, and driving records. The League is opposed to this bill and will be testifying next week in regards to our issues with local preemption.

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 Road Funding Plan Passed Out of Roads and Ecomomic Development Committee

The House road funding plan that would that would rely primarily on future growth, cuts to MEDC, and the elimination of the earned income tax, to raise $1 billion for road and bridge repairs was voted out of committee today. With the exception of one bill, the 12 bill package was voted out on a party-line vote with the five Republican committee members voting yes.

The proposed package of bills has less than $50 million in new revenue. It neglects to make a much need investment in transit and jeopardizes economic development funding many of our communities benefit from. This plan also impacts the long-term certainty our communities need to plan and one of the key factors for our opposition.

The League firmly believes we must find a sustainable long-term solution to the problem that includes new revenue that is dedicated to the entire transportation system. We have offered testimony on multiple occasions explaining or dissatisfaction with this proposal. Our advocacy efforts will continue to focus on a solution that included new revenue and makes much needed investments in public transit.

It is anticipated that the full House will vote on these bills out next week.

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.

Committee Hearings Continue on House Road Funding Plan

The Roads and Economic Development committee held a second day of hearings on the House road funding plan. The committee first took testimony on HB 4615, HB 4614, and HB 4616, which would increase the diesel fuel tax to 19 cents per gallon on October 1, 2015, making it equal to the tax paid on gasoline. Beginning in 2016, it would adjust the tax for inflation or by 5 percent, whichever is less. The changes would generate $45 million in new revenue. Next, the committee heard testimony on HB 4612, would raise registration fees on hybrid and electric vehicles, generating about $5 million in new revenue.

These four bills are the only bills that generate new revenue for roads. The League has continually stressed the point that our current infrastructure needs cannot be solved without a significant and dedicated source of new revenue and we continue our opposition to any plan that does not address this concern.

Finally, the committee took testimony on, and the League testified in opposition to, HB 4607 and HB 4608. These two bills would cut MEDC funding by $145 million and redistribute that revenue to roads. This redistribution of revenue would have a potentially devastating effect on the Community Revitalization Program, Public Spaces and Community Places program, and many other MEDC grant opportunities our members take advantage of. Additionally, the funds that would be diverted to roads would bypass any additional funding for public transit, further continuing the trend of not investing adequate resources to improve our entire transportation network.

Next week, the committee will hold its final day of testimony and will discuss bills that will dedicate General Fund dollars to roads.

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.