Road to Ruin

by Neil Munro
April 1, 2010

Our Lansing lawmakers are on the brink of one of their periodic road-funding fiascos.

The fuel tax rate approved in 1997 generates far too little money these days to keep our highways and byways up to snuff. Citizens are complaining. Yet the senators and representatives clearly dread raising taxes to improve the roads.

The agony must be especially painful politically in this new era in which the mantra of most Republican lawmakers at all levels of government is “no new taxes.”

Nonetheless, a bill to increase the gasoline tax by 4 cents a gallon now and 4 cents in 2013 is before the legislature in Lansing. The increase would be to 19 cents a gallon, then to 23 cents.

To make matters more ominous, failure to act would not just limit state support for our roads, but actually would reduce federal support. The Congress demands a certain level of state taxation, without which it shrinks its contribution.

So the status quo is not an option. Either our lawmakers raise road taxes or there will be even less money to spend. Don’t feel sorry for yourself. Half the states levy higher fuel taxes than Michigan does. That’s been the case for about 40 years.

Besides the tax for road building and maintenance, a 6-cent sales tax also is charged on the motor fuel we buy. But those proceeds are not earmarked — and not used — for road work.

To complicate matters, Michigan gets back just 92 percent of the federal road tax dollars it sends to Washington. Despite our slumping economy we remain a “donor state!”

It’s worse yet in Oakland County. It’s a donor within the state, too. About a third of the road taxes collected in Oakland are spent elsewhere in Michigan. Meanwhile, 20 percent of that “rich” county’s roads are rated as being in poor condition because of the fund shortage.

Overall, Oakland, Macomb and Wayne counties are among the bottom 10 in Michigan in the amount of money per citizen their road commissions get for construction, maintenance and repairs.

The chronic money shortage compounds the problem of highway deterioration. Reconstruction of a worn road costs three times as much as steady preventive maintenance, not surprisingly. And in the winter there is less plowing and salting of roads. Oakland’s road worker ranks are down 14 percent since 2007, for lack of funds.

Without more highway money raised in Michigan, we soon will lose about a billion dollars in federal funds, according to a state transportation funding task force. It urged the state to double current road spending to $3 billion a year.

The federal government very seriously discourages states from trying to shift more of the road-spending burden to Washington by doing less and less themselves.

Despite knowing all this, one presumes, our state government seems strangely passive in the face of what one only can describe as a crisis. Gov. Jennifer Granholm’s proposed 2011 state budget calls for no increase in road funding; perhaps because the 2010-11 fiscal year will end with a $1.6 billion shortfall.

There has to be a more rational response, and there is. In fact, the governor had at least suggested it earlier: make the road tax a fixed percentage of fuel sales, not a fixed number as it is now.

Were that the case, we no longer would have to go through the political agony of increasing that tax rate every time monetary inflation rendered the existing number obsolete. Instead, we’d be watching the rate rise along with the decline in the value of the dollar. That would keep the buying power of our fuel taxes about the same without their continually having to be increased at the polls.

As a matter of fact, if our road tax rate had been tied to the rate of inflation from 1997 until now, it automatically would have ended up just a bit higher than the increase the lawmakers now face approving; 25 cents a gallon instead of 23 cents.

It obviously also would have been generating extra dollars along the way, and the highways already would be much better for that. But here we are with the fixed-rate road revenue having drifted down to its lowest buying-power level since the 1960s!

There are reports in Lansing that our lawmakers are well aware of the desperate need for more road dollars, but that they’re waiting to take action until after they’ve been safely re-elected in November.

That rings true because the same reluctance to hike road taxes was noted in this space in 2008. Nothing was done then, though, to offset the ravages of inflation, even after the election.

Tell your legislators to grow a backbone this time.

Neil Munro is the retired editor of the Oakland Press in Pontiac.