CHICAGO - Even as rising gas costs threaten Michigan's transportation revenues, the state needs to double spending on its roads and bridges or up to 30% of roads will become unsafe within the next decade, according to a report on the state's transportation system released this week.
The report comes as a task force appointed by Gov. Jennifer Granholm explores alternative ways to fund the state's transportation system, including leasing sections of public roads to private companies to generate up-front cash payments, said one member of the task force subcommittee.
At least $6.1 billion in annual funding is needed for basic upkeep on roads and bridges compared to the roughly $3.2 billion the state currently spends, according to the report released this week by the Citizens Advisory Committee, a group of local officials and transportation experts. The committee studied the state's roads and bridges, public transit, aviation, and freight systems - and found all in dire need of additional money.
The 13-member Transportation Funding Task Force will use the report to make recommendations on alternative funding sources to lawmakers later this year.
The state's roads and bridges are in a "crisis" in part due to long-term neglect - Michigan ranked 44th nationally in 2005 for road expenditures - as well as a decline in gas tax revenue, which funds one-third of the general transportation fund, the report said.
Like drivers across the country, Michigan drivers have curtailed consumption in the face of rising gas prices. This has bitten into revenue generated from the state's 19-cent-per-gallon gas tax. In total gas tax revenue has declined by $65 million from 2003 through 2007, said committee members, and the decline is expected to worsen through the year.
The decline also means the state faces the loss of up to $950 million in annual federal aid starting in 2010 because it will no longer be able to meet the 20% local match needed to obtain the funding, the committee warned.
"We have a transportation network that is literally crumbling beneath us," said Gretchen Driskell, the chair of the Citizens Advisory Committee, in a release accompanying the report. "The status quo essentially guarantees our transportation system will continue to collapse."
The expiration of some of the transportation department's bond programs has also contributed to the state's problems by curtailing its borrowing ability, according to Keith Ledbetter, a committee member and the director of legislative affairs with the Michigan Infrastructure and Transportation Association.
"We've borrowed all the money we can without additional revenue sources," Ledbetter said. The Build Michigan I, II, and III programs ended in recent years, and the Jobs Today program is nearing its end this year.
Michigan's gas tax funds about a third of its general transportation fund, while another third comes from vehicle registration fees and the final third from federal aid. Consumers also pay a 6% sales tax on gasoline purchases - Michigan is one of only a handful of states to include a sales tax on gas purchases - though very little of that money goes into the transportation fund.
Meanwhile, the state needs to spend an additional $470 million annually to keep its transit system in good shape and an additional $120 million to provide necessary improvements to its aeronautics system.
The task force is holding a series of public meetings and will present state officials with a list of funding alternatives in the fall.
One funding possibility is leasing public roads to private companies, Ledbetter said.
One obstacle, though, is that current federal law prohibits tolling on roads that have been paid for with federal dollars - and nearly all Michigan's roads have used federal dollars, Ledbetter said. While some states want exemptions, some members of Congress, especially those who oppose public-private partnership transactions, also oppose such tolling.