Tag Archives: Road Funding

Roads Deal Passes Michigan Legislature, Governor Snyder Prepares to Sign

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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 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

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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.

 

Is there a Plan B if Proposal 1 Fails? Why are Michigan’s Roads so Bad? Find Out in New League videos

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Fowler plan bIt’s just two weeks until voters decide the fate of Proposal 1 on May 5 and the Michigan Municipal League has just posted a series of question and answer videos to address some of the concerns you may have about the road funding plan.

The videos come from a panel discussion during the League’s 2015 Capital Conference that took place in March.

The general session, “Driving Toward Safer Roads with Proposal 1,” was moderated by Roger Martin, of the Martin Waymire public relations firm and spokesman for the Safe Roads Yes! coalition. Panelists were Mike Flanagan, state superintendent of the Michigan Department of Education; Rob Fowler, president and CEO of the Small Business Association of Michigan; Grand Rapids Mayor George Heartwell; and Kirk Steudle, director of the Michigan Department of Transportation.

View all the League’s Proposal 1 information here, including an updated list of all the Michigan communities that have passed resolutions in support of Proposal 1.

Steudle bad roadsHere are the questions posed and subsequent answers. The videos are all very short:

The League also has a new slide show illustrating how much in new money for roads and constitutional revenue sharing each Michigan community will receive if Proposal 1 passes. The numbers are substantial. It’s a long video but it’s in alphabetical order so you can advance to the parts you want to see. You can also view a pdf of that video here, which will allow you to advance through the list more easily.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org and (734) 669-6317.

Michigan Communities Pass Resolutions in Support of Proposal 1 for Safe Roads

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A road crew fills potholes in Macomb County.

A road crew fills potholes in Macomb County.

Multiple Michigan communities have passed resolutions in support of Proposal 1 for Safe Roads ballot item on May 5, but we need more to also declare their support.

So far the League has been informed that the following communities have passed Vote Yes on Proposal 1 resolutions: Clare, Elk Rapids, Lapeer, Norton Shores and Wakefield.

We expect many more resolutions to be approved over the next few weeks.

The Michigan Municipal League is encouraging its member communities to approve resolutions in support of Proposal 1 following the League board’s endorsement of the road funding plan in January. View a sample resolution here.

The League also is asking members to send their local media letters to the editor in support. Go here to view sample letters.

Plywood under bridges attempt to prevent pieces of the bridge from falling on vehicles.

Plywood under bridges attempt to prevent pieces of the bridge from falling on vehicles.

We know that many people still have questions about Proposal 1 and in response we’ve posted this free webinar about the plan and why the League supports it. Check it out here.

Go to the League’s Safe Roads Yes web pages to get additional details, including talking points, neutral information, the official Proposal 1 ballot language, media coverage of the issue, and the amount of additional road revenue and constitution revenue sharing that would go to each community if Proposal 1 passes.

Join the Safe Roads Yes! coalition here.

(Note: Some have asked is it OK for my community to pass a vote yes resolution? Go here for details).

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org.

Senate Fails to Pass Road Funding

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The Senate adjourned until July 16 after several failed attempts to provide additional road funding to fix Michigan’s infrastructure. Failing to act means our roads and bridges will continue to fall into greater disrepair. We will not only fail to maintain existing infrastructure but won’t be able to invest in additional infrastructure to attract and retain talented employees and job providers.

The League will be relentless in the pursuit of additional funding and we want to thank all of our members who have reached out and asked your legislators to support long-term sustainable solution. Your efforts have not gone unnoticed by those in Lansing.

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

Road Funding Bills Passed Out of House Committee

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The House Transportation and Tax Policy committees voted out a series of bills today that represent the first step in securing more road funding for our local communities. Each of the bills received bipartisan support, but the acknowledgement still remains that there is more work to be done.

This is the first real step taken by the legislature to come up with a solution to fix our infrastructure. Changes are still needed to these bill to ensure that they represent a comprehensive solution for the transportation needs of this state. The League continues to work with leadership, the sponsors, and other interest groups to improve these bills.

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

Additional Testimony Taken by House Transportation Committee on Road Funding

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For the Second time this week the House Transportation Committee took testimony on the transportation fund plan proposed by Speaker Bolger.

In testimony today the League thanked the legislature for the continued discussion but expressed our concern about this plan not representing a comprehensive solution and the lack of funding it provides in support of public transit. We have, and will continue to, offer suggestions on way to improve this legislation with the goal of finding a sustainable solution for the needs of Michigan’s transportation network.

Also testifying today were the Michigan Chamber of Commerce, the Michigan Environmental Council, and the Michigan Public Transit Association. Each of these three organizations echoed the need for additional funding to be added and strong support for the inclusion of transit in any long-term solution.

The League is very appreciative of the comments made by these organizations and will continue to work with them to find a solution to Michigan’s infrastructure needs.

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

Senate Transportation Budget Includes More Money for Locals

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The Michigan Senate Appropriations Committee voted out SB 777 that included and additional $115 million in road funding to be distributed between MDOT, counties, and cities and villages. From that $115 million cities and villages would receive $25 million. An amendment was added to the budget that would disperse the money in one lump sum payment in November of 2014 and not spread out the payments over the fiscal year. This bill will now go before the full Senate for a vote.

Also included in the budget was $2 million for the Regional Transit Authority for non-operational expenses.

This budget fails to address the long-term road funding needs in Michigan. The committee spoke about this at length and expressed their commitment to finding a solution. The League will continue to work with our partners in the Senate on this issue and we appreciate their continued efforts to solve Michigan’s infrastructure needs.

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

 

Additional Road Funding for Michigan Communities Awaits Governor Snyder’s Signature

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(Update: View a joint press release on this issue)

The Senate and House quickly approved SB 608 after the conference committee voted it out just before noon this morning and it now awaits the Governor’s signature. The bill includes $215 million in general fund dollars for roads. Of that $215 million, $100 million will be distributed through the Act 51 formula to local road agencies to be used on maintenance as a result of this years harsh winter. It requires that the $100 million in special winter road maintenance funds be used only for road maintenance, excluding administrative, overhead, and other indirect costs.  The remaining $115 million will be used for priority road projects identified by individual lawmakers and prioritized by the Legislature’s leadership. An amendment was adopted that states if the money for priority road projects is not obligated by July 1, 2014 the remaining balance would be distributed through the Act 51 formula.

It is anticipated this bill will receive the Governors signature before the end of the week. The League is very appreciative of the efforts of the legislature to deliver additional road funding to our local communities during this time of need. The League would also like to thank our members who took the time to contact their legislator on this issue. The following link will provide the amount each city and village will receive from the $100 million after it is distributed through the formula.

$100 Million Breakdown for Cities and Villages

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