State Lament: The Road Goes Ever On, and So Do
the Potholes

Transportation chief could face loss of billions in federal aid

by Eric Freedman
December 16, 2009

So you think Pat Caruso has a tough job culling thousands of inmates and hundreds of millions of dollars from her Michigan Department of Corrections budget while appeasing members of the public worried about releasing ne’er-do-well criminals back on the streets. At least she can blame her problems on the bad guys — the cons — for doing bad stuff and ending up behind bars.

MDOT Director Kirk Steudle. Photos by David Trumpie.

But poor Kirk Steudle, the Michigan Department of Transportation director, has to worry about losing 8 federal dollars for every $2 the state falls short to maintain roads and bridges while the public grouses about abyss-like potholes and while some cash-strapped counties grind crumbling asphalt roads back into gravel.

And unlike Caruso, Steudle has to point the finger at the good guys — people who drive less to save fuel and money, people who switch to hybrids and other fuel-efficient vehicles, people who drool in anticipation over electric vehicles. The less gas they buy, the less tax revenue comes in to support the transportation infrastructure. In fact, aside from vehicle registration fees, those promised battery-operated cars that won’t need a drop of gas or diesel will literally become free riders on the pitted roads of the Great Lake State.

The 46-year-old Steudle’s place to deal with the complexities of cars, trains, boats, buses and planes is an office with the expected transportation-related décor, including a model Canadian National railroad car — he’s always loved trains, he enjoyed a 75-mph train ride in Japan and has shared the pain of spending two hours waiting for his train to get out of Chicago’s congested rail yard. He still has his boyhood Lionel set.

An overhead shot of the Mackinac Bridge with a ship passing below is especially fitting, given his off-hours interests. As much as he likes trains, he’s been around boats all his life and they spark a special passion: “If I have open time. I love the sound of the water.” To hear that sound, there’s a 16-foot Hobie Cat sailboat he used to race with, although it spends more time sitting on the beach than in the water between the 4th of July, when he gets it out, and Labor Day, when he cleans and stores it for the winter. There’s the Jet-Ski he used to teach water skiing to his daughter, now an engineering student at Michigan State, and his son, now a high school sophomore. And there’s his latest acquisition, a 19-foot Crownline speedboat he uses in Whitmore Lake.

MDOT career
Steudle grew up in Adrian in a family of teachers, and he jokes that he became “kind of an outcast” when he headed to Lawrence Technological University to study construction engineering. “No one understood the math and science I was taking.”

When he returned to his hometown as an MDOT trainee on a street project in front of City Hall — right outside the city engineer’s window — he had an “oops” moment that shaped his future attitude as a manager and now as director. “I told an engineer to stake something wrong that was not on the plans. I learned so much from how he handled it,” Steudle recalls. “He told me that everybody’s going to make mistakes. Rule 1 is to own up to it.”

The good news, he continues, is that the goof was fixable and didn’t cost any money. He keeps a brick from M-52 — Main Street in Adrian — in his office as a reminder of how to handle an error. “I can’t stand the blame game,” he says. Instead, “fix the problem first” and go on from there.

John Niemela, director of the influential County Road Association of Michigan, says: “We’re not always holding hands, but he has the ability to understand our conditions and problems.” The result is a better relationship with the counties than any previous MDOT director in more than a decade.

There are areas of disagreement, including an ongoing struggle over funding for county and municipal road agencies that provide maintenance work for MDOT under a statewide contract, according to Niemela. But “with Kirk, we’re not totally at odds on something and we walk away.”

Steudle attributes his relationship with county road commissions and city agencies in large part to his own experience on the nonpartisan Essexville City Council while heading MDOT’s Bay Region. When the city needed engineering expertise to revamp its aging water and sewer system, he was appointed to a council vacancy, then won two elections to keep the seat. He quit when the department transferred him to Southfield to run the Metro Region. “I know what city commissioners and planning boards and county commissions are doing. I have a little more empathy for their decisions,” he says.

Steudle landed the directorship in 2006 after 19 years with MDOT when Gov. Jennifer Granholm promoted him from chief deputy engineer. When his cell phone rang during a Lansing meeting with Traverse City business, community and environmental leaders, he slipped out of the room to listen to her job offer.

“My cell phone is always on,” he says, crediting his high school sweetheart-turned-wife Marilyn for putting up with the late-night and weekend calls that come with the territory. Sometimes it’s the governor at the other end of the line, as happened when the state was fighting for federal stimulus funding for transportation projects. Other outside-business-hours calls are event-driven, as in the run-up to the 2006 Super Bowl XL at Detroit’s Ford Field when he was still chief deputy engineer and needed hourly updates to make sure the snowplows were in the right places.

“Kirk has put fresh new energy at MDOT that has allowed the organization to be more efficient and more effective by allowing some of the staff to spread their wings a little bit,” says Michael Nystrom, vice president of the construction trade group Michigan Infrastructure & Transportation Association (MITA).

“Looking back in time, there was an environment at MDOT that seemed to be headed in the wrong direction as far as motivation under previous directors.” Nystrom continues, declining to name names. He credits Steudle with being allowed by the governor’s office “to step out of the box and say how it really is rather than sugar-coat it.”

Yet there are times when Steudle and MITA are on opposite sides of an issue. For example, when MDOT boasted that 90 percent of state highway pavement was in good condition, the actual statistic that may have been accurate but MITA felt it misled the public into thinking that roads overall were okay. That’s because MDOT controls a bit less than 10,000 of the state’s 120,000 miles of pavement — the rest, which are county and city responsibilities, are in far worse shape, according to MITA.

Nystrom says of Steudle, “He is not somebody who is a yes-man to the industry, yet he’s willing to listen. When we differ on our opinions, he has good reasons to back up his decision, and when he does decide to listen to our ideas and consider them, he is doing it for good, sound reasoning.”

Challenges
In many — perhaps most — ways, the future of Michigan’s transportation system, from the basics of mowing freeway medians to the future of light rail and airport projects, are far outside the control of any MDOT director, regardless of the party in power.

What that system looks like 10 years from now will be shaped largely on the federal level by national energy policies — spending priorities, investment in technology and infrastructure, fuel prices and so on, Steudle emphasizes. Meanwhile, the state is angling for federal largesse for future-looking endeavors, such as a collaborative effort by Midwest states to develop high-speed passenger rail capacity.

If gas prices return to $4-a-gallon levels rather than staying at $2.65 or so, things will look different a lot sooner.

“We saw things happen when it was $3.50 and above. People were making different choices,” Steudle says, citing a rising demand for carpool lots and bicycle commuting as examples. He predicts that train travel will become more attractive for trips of 500 miles or less, although it will require a “massive investment” to bring rail lines up to speed, aside from major routes like Detroit–Chicago and Grand Rapids–Chicago. And if the existing freight route between Ann Arbor and Traverse City could carry passengers between those two cities in less than five hours, “we might get people on trains.”

There’s no dispute that the transportation system faces serious challenges without enough cash to meet those challenges. For example, the state Auditor General’s office chided MDOT for failing to complete bridge inspections in compliance with federal and state requirements. And MITA recently released data from the Michigan Asset Management Council that highlights counties and cities with the poorest roads. Airports also are suffering due to the declining number of flights, passengers, aviation fuel tax revenue, even parking revenue.

And then early in December, MITA moved to build public pressure on the legislature — and lure press coverage — by highlighting the fact that the updated draft of MDOT’s five-year transportation program includes 243 project delays, beyond the 137 projects that were delayed in the spring. The reasons, according to the association, are the continuing drop in gas tax revenues and “now the state’s inability to match federal dollars.”

Legislative dealings
Another beyond-the-director’s-control arena is the legislature, operating at the Capitol within view of Steudle’s office in the Murray Van Wagoner Transportation Building. The building carries the name of a Democratic governor of the early 1940s who — like Steudle — was an engineer and held the equivalent post to Steudle’s, state highway commissioner.

While Steudle’s predecessor, Gloria Jeff, ruffled a lot of feathers with legislators, other members of the Granholm administration and local officials, he manages to keep pretty much on everyone’s good side, even as his personnel and budget have shrunk. He declines to speak ill of any legislator, past or present, but praises the two Transportation Committee chairs, Rep. Pam Byrnes (D-Chelsea) and Sen. Jud Gilbert (R-Algonac) for their grasp of transportation issues.

The county road group’s Niemela says Steudle knows the type of relationship he needs to maintain with lawmakers. “He works for the governor but has a very good understanding of what needs to be done working with the legislature,” Niemela continues. “That’s a fine line.”

Steudle does show off an elephant-shaped bagel on a wooden plaque in his office but denies it has any political overtones. Indeed, the advice painted on the plaque is clearly nonpartisan — “one bite at a time.” That’s the answer to the question of how to eat an elephant, or tackle a major project.

It will be up to lawmakers in Lansing to decide how to fund projects of the future, whether this year, next year or decades down the road. One third of MDOT’s $3.6 billion-a-year budget comes from the fuel tax, one-third from registration fees and one-third from Washington, much of it passed on to counties and cities. Legislative options include increasing the fuel tax of 19-cents-per-gallon, last raised in 1997, switching to a tax system based on miles driven — and thus ensuring that fuel-miserly vehicles pay more than they do under the current set-up — bumping up vehicle registration fees, doing something else or doing nothing at all.

Steudle would like the state to move away from per-gallon taxes and to a tax based on a percentage of the fuel’s sales price. He also would like a five-year, 90-percent increase in the registration fees for autos and light trucks: 10 percent the first year, then annual increments of 20 percent.

The Senate Transportation Committee did just approve a 4-cents-a-gallon hike in the diesel tax that it estimates would raise $36 million for bridge work. The Granholm administration supports the proposal. Given the Republican Senate’s refusal so far to raise any taxes this fiscal year, however, as well as Majority Leader Mike Bishop’s personal less-than-enthusiastic reaction to the committee move, the fuel tax hike option appears at a dead end for now.

Steudle intentionally hasn’t taken the lobbying lead in favor of fuel tax increases, preferring instead to work with advocacy groups, including the Michigan Transportation Task Force, whose members included Sen. Gilbert, Michigan Chamber of Commerce President Rich Studley and Dennis Gillow, treasurer of Local 324 of the International Union of Operating Engineers.

But doing nothing at all carries big risks, and that’s where Steudle’s $2-will-get-you-$8 problem comes in. The state must put up 20 percent of the money for projects if it’s to get the remaining 80 percent from Uncle Sam.

The potential loss of federal aid for the 2011 fiscal year could be as much as $600 million if Michigan fails to meet the match requirements. Over a five-year period between 2011 and 2014, it could total a $2.1 billion drop in federal funds. Combined with the loss in the state’s contribution, MDOT estimates that the program would be down by $2.45 billion for that period. “If we can’t match federal aid, we have to figure out what we’re not going to do,” he says.

The inevitability of change and obstacles is perhaps symbolized by another brick in Steudle’s office, this one from a Michigan Avenue repair project in front of now-demolished Tiger Stadium. The future that he foresees will mix transportation choices, including Detroit’s planned new ferry and cruise ship terminal, a proposed light rail line along Woodward Avenue and a proposed commuter rail route between Ann Arbor and Detroit. But he adds, “We’re going to have cars forever. We’re going to have roads forever.”

Pulitzer Prize-winner Eric Freedman is associate professor journalism and director of Capital News Service at Michigan State University. He and Dome columnist Stephen A. Jones are editors of African Americans in Congress: A Documentary History (Congressional Quarterly Press).