CHICAGO — Michigan Gov. Rick Snyder laid out an ambitious infrastructure plan Wednesday, saying the state needs $1.4 billion of new money to maintain its roads and bridges and should borrow $600 million for sewer and water projects.
The first-term Republican governor proposed that the state replace its long-standing per-gallon gas and diesel tax collection formula with a wholesale tax on the price of fuel. The move, which needs legislative approval, would make Michigan the only state to collect just a wholesale fuel tax.
Snyder also suggested a new transit authority to create a regional high-speed bus system around Detroit.
“That’s a discussion that’s been going on for almost as long as I’ve been alive,” Snyder told an audience of the press and infrastructure experts at Lawrence Technological University in suburban Detroit. “But for Michigan to be a great state, Detroit needs to be a great city, and we need a transit system that really works.”
He said the plan — which would likely call for a new regional transit tax — has the support of U.S. Secretary of Transportation Ray LaHood, and that Snyder and Detroit Mayor Dave Bing have agreed to co-chair a task force promoting the plan.
The infrastructure speech is the fourth of Snyder’s so-called special messages, in which he lays out his vision and priorities. He said many consider infrastructure boring when compared to education, local government reform, or the budget.
“But when it comes to this topic, it’s what we take for granted, and what we take for granted is slipping,” Snyder said. “We’re a state that wants to move forward, not backward.”
Noting that only 68% of the state’s roads and bridges are considered in good condition, Snyder said Michigan has underinvested in infrastructure for far too long. A recent legislative study warned that the state needs a minimum of $1.4 billion annually to maintain its current system, a figure that Snyder said he supports.
“The biggest single topic is that we just need more money for our infrastructure for roads and bridges,” he said. “I’m proposing we need to find revenue sources.”
He suggested that officials hold a series of public meetings on the ways to come up with new money. He pitched such possibilities as raising state registration fees by $10 a month on passenger vehicles, which would raise $1 billion annually, and allowing counties to increase registration fees by up to $40 a year, which would raise another $300 million.
“I view that as a good starting point for an open dialogue,” he said.
Snyder’s proposal to replace the current per-gallon gas and diesel tax with an estimated 6.7% tax on the price of fuel would not raise significantly more money in the beginning, but would allow the state to collect more over the long term as the wholesale tax rises with inflation.
“It’s an issue of buying power over the long term,” he said. “So we don’t have to come back every year with new changes.”
The gas tax accounts for roughly 50% of Michigan’s $1 billion transportation budget. For years, officials have warned that gas tax revenue is falling to the point where it threatens the state’s ability to come up with matching funds for crucial federal funding.
On the bonding side, Snyder pointed out that at least $600 million of a $1 billion bond issue approved by voters in 2002 remains unspent. He suggested heading to market with the rest of the bonds and using the proceeds to finance a variety of sewer and water capital improvement programs.
Meanwhile, a week after a key state Senate subcommittee rejected the controversial plan to build a new $4 billion publicly funded bridge from Detroit to Canada, Snyder told the audience that he would still push for a new span.
“We’ve had some setbacks but we’re going to remain relentless, because I believe it’s in the best interest of our citizens,” he said.