A special presentation was made by Managing Director Steve Puuri on Michigan's current transportation funding challenges, the state of the Road Commission, and the Drive MI Campaign, at the Washtenaw County Board of Commissioners meeting held on February 7, 2007.
Puuri began his presentation with a brief overview of the many services road agencies provide, after which he explained how these services and the statewide transportation system are being directly impacted by in unmet revenue needs!
"The current local road funding is $1.9 billion less than the system's annual revenue needs," explained Puuri. "These substantial funding shortfalls are due in part to the exorbitant off-the-top transfers that are annually taken from the Michigan Transportation Fund (MTF), as well as insufficient revenues being generated through fuel taxes and vehicle registration fees."
The MTF is the primary source of funding for road agencies statewide, so road commissions are seeing these annual transfers adversely affect their county road systems. The transfers subsidize many non-transportation-related state agencies, such as the Secretary of State and the Recreation Fund, as well as a number of administration grants. MDOT statistics show that these deductions rose to nearly $105 million in 2004; resulting in less funding for roads. As for the Washtenaw County Road Commission, this long-standing practice of utilizing MTF monies to fund non-road related agencies has resulted in $960,000 less revenue, annually to maintain the county road system.
Puuri reported that the Road Commission budget has been steadily decreasing since 2004. In 2007, the expected gas tax and vehicle registration revenues will be $17.1 million, approximately $500,000 less than was received in 2004. Since these allocations provide for approximately 50% of the agency's total annual revenue, the Road Commission is finding that conducting “business as usual” with reduced funding levels is not going to work anymore.
Commissioner Mandy Grewal inquired as to whether part of the revenue shortages were due to less gas consumption; she asked if it had decreased in Washtenaw County during the past year due to the higher gas prices. Puuri responded that since the MTF revenues received by the Road Commission in 2006 were less than the previous year, and the gas tax is the largest component of the MTF, it can be presumed that gas purchases have declined.
Statistics show that MTF revenues for the Road Commission have increased by only 49% since 1997, (coincidentally, when the last gas tax increase was imposed), while the cost for routine maintenance has increased by 87%! Health care costs alone for the Road Commission have risen $1.5 million per year since 2001. This, combined with other rising costs for equipment, fuel, road materials and overhead expenses, has severely reduced the Road Commission's available capital spending by 62% since 1998.
During his presentation Puuri also presented the 2007-2011 Capital Improvement Plan (CIP), and explained the service level adjustments and other cost-saving measures that were approved and implemented by the Board of County Road Commissioners last November, in order to effectively balance and work within the agency’s stagnant 2007 budget.
Just a few of the adjustments include reducing overtime snow removal services when less than 3 inches of snow has accumulated, requiring a 50/50 cost-sharing participation from townships for local road bridges, reducing the annual pavement resurfacing program (in past years, the Overlay Program was funded at approximately $1 million; however, resurfacing was reduced to $150,000 in 2006, and zero funds are designated for 2007), and increasing some employee co-pay for health care benefits to reduce rising costs.
Several County Commissioners inquired about 2007 construction projects, and the Road Commission's policy on incorporating non-motorized transit as part of the road improvements. Puuri reported that the Road Commission has been actively involved with the Washtenaw Area Transportation Study (WATS) non-motorized plan development since its inception, and continually looks for opportunities to incorporate bike and pedestrian paths in projects whenever possible. Puuri cited some examples, such as adding 3 to 4-foot paved shoulders along roadways as they are being resurfaced, as well as including new sidewalks in major reconstruction projects, such as the Jackson Road boulevard widening project in Scio Township.
Several Board members inquired about the Drive MI Campaign, and extended their support of the road funding initiative. Commissioner Leah Gunn noted that she did not see any mention of public transit in the Drive MI Campaign materials that were provided to the Board prior to the meeting; she indicated she would like to see mass transit included, as it is an important part of the transportation system. Puuri explained that up to 10% of the MTF may be transferred to the Comprehensive Transportation Fund (CTF) for use by transit agencies around the state. He explained that any increases in the fuel taxes or vehicle registration fees would therefore benefit public transit as well as roads.
Commissioner Mark Ouimet made special note of the extensive list of businesses, associations and agencies that comprise the Michigan Transportation Team (MTT), a group that formed a partnership to initiate the Drive MI Campaign, with the common goal of improving Michigan's transportation infrastructure, finding a comprehensive solution for fully funding state and local transportation projects and ensuring a fair allocation of those resources throughout the state. Ouimet expressed his admiration that so many different groups could come together on this important issue, adding that with such vast support behind the initiative, he believed it will have a better chance of getting into legislation.
Puuri advised the Board that he and other supporters of the Drive MI Campaign will be making presentations and providing information to citizens and local officials over the coming months. The MTT and road agencies are recommending to local legislators the necessity for a 9¢ per gallon gasoline tax increase over three years, as well as to implement parity in the diesel fuel tax, increase the vehicle registration fees, and eliminate the interdepartmental transfers off-the-top of the MTF revenues.
On January 10, 2007, Puuri made a similar presentation to members of the Southwest Washtenaw Council of Governments (SWWCOG). If you or your group are interested in scheduling a presentation on the Drive MI Campaign initiative, and/or have questions regarding the current statewide transportation funding challenges, please contact Val Cooper, WCRC Public Information Officer, at 734.327.6675, or via email at cooperv@wcroads.org.