Traverse City Record-Eagle

Opinion

May 23, 2013

Phil Power: A route to new road dollars

Finding money to fix our crumbling roads has been by far the biggest (ahem) roadblock in Lansing for many months.

Although nobody’s willing to come out and say so publicly, within the last few days a structure has emerged for getting the estimated $1.2 billion needed each year to fund our transportation infrastructure, particularly roads and bridges.

The thought is to repeal the 6 percent retail sales tax on gas and diesel motor fuel and replace it with an as-yet-undetermined percentage tax at the wholesale level. That tax could be adjusted for inflation in years to come.

Most of the revenue from the 6 percent gas sales tax goes to non-transportation purposes, particularly aid to K-12 schools and revenue sharing for local communities. Repealing the gas tax would produce a significant shortfall for both.

To fill the hole, the idea is to put on the statewide ballot a proposal to increase the current state sales tax from 6 percent to 7 percent. My sources in state government tell me this should be enough to plug both budget holes, maybe with a little left over.

Conditions on Michigan roads are poor and getting worse. A Michigan Department of Transportation chart http://bridgemi.com/wp-content/uploads/2013/05/MDOT-Presentation.ppt shows the percentage of good roads has dropped from around 24 percent to 19 percent since 2004, while the percentage of poor roads has increased from 12 percent to 34 percent over the same period.

Worse, Michigan invests far less on transportation infrastructure than our neighboring states. We spend $174 per person, http://bridgemi.com/wp-content/uploads/2013/05/MDOT-Presentation.ppt while Ohio spends $235, Wisconsin $231 and Minnesota $315. Even Indiana (miserly or economical - your choice) spends per capita more than we do, $187 versus $174.

According to the Michigan Department of Transportation, 35 percent of total U.S.-Canadian trade goes through Michigan, something like $520 billion via highway, rail and water links. Tourism in Michigan is primarily auto-based, generating nearly $18 billion in business for 2011. MDOT also estimates that the return on $1.2 billion in transportation infrastructure will yield $10 billion in increased personal income for Michigan citizens. http://bridgemi.com/wp-content/uploads/2013/05/MDOT-Presentation.ppt

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