2011-10-30 / Opinion

Roads proposal worth consideration

IN OUR WORDS

Gov. Rick Snyder said Wednesday that the state needs to spend more to repair roads and improve bus service, but he’s leaving it up to the Legislature and voters to decide whether to raise yearly vehicle registration fees to pay for the work.

Snyder suggested raising fees by from $40 to $120 annually per vehicle registered. Depending on the level, that would raise $300 million to $1 billion a year to help shore up the state’s crumbling roads and strapped bus systems. A recent bipartisan study found Michigan needs to spend $1.4 billion more a year to repair deteriorating roads, yet is losing ground as gas tax revenues plummet because higher prices have cut demand and newer vehicles use less gas.

More money could be raised if voters approve allowing counties and regions to assess their own vehicle registration levies of up to $40 annually.

Snyder also proposes shifting Michigan’s taxing of fuel from the retail to the wholesale level, levying it as a percent of the price per gallon instead of the current flat fee per gallon. Although the state would collect more tax when gas costs more, Snyder said the idea was not to raise gas taxes, but stabilize them, with caps and minimums to prevent windfalls from soaring prices or revenue declines when prices drop.

The $1.4 billion target is based on the findings of a House Republicans’ road study released in September, but Snyder’s strategy to reach that goal is expected to meet with resistance from Republicans who control the House and Senate and have vowed they will resist any tax increases.

The registration fee funding would be needed on top of revenues to be generated by a Snyder proposal to switch from a 19-cents-per-gallon retail gas tax to a tax on wholesale fuel prices. Revenues would be held at their current level by initially setting the wholesale fuel tax at 6.7 percent.

Sure to spark controversy was Snyder’s call for an end to county road commissions, which he said are “unneeded” — a proposal that dovetailed with bipartisan legislation introduced Wednesday in the House that would allow county commissions to take over their road planning. Michigan has 617 independent road agencies and 79 independent transit agencies.

“We are the only state in the country that has county road commissions — 81 of them in total — and 35 of those are not accountable to the rest of county government,” he told reporters this week.

Snyder also suggested to change the way road money is distributed from the state to local governments so it’s targeted to needs. Thirty-nine percent of state and federal road funds goes to the state, while 39 percent goes to county road commissions and 22 percent to cities and villages.

Few of us who drive about the state regularly would argue the infrastructure isn’t deteriorating from a lack of investment, the resolve made complicated because state and local road programs are organized on an antiquated model devised when the Legislature wrote the state’s main road act in 1951.

Vehicle registrations are based on the value of the vehicle for models 1984 and newer; older vehicles are taxed on their weight. The Secretary of State’s office estimates vehicle registration fees bring in about $950 million a year.

Michigan’s road funds have declined as consumers have cut back on purchases due to gasoline prices spiking as high as $4 a gallon. A wholesale tax would allow revenues to rise or fall with changing fuel prices instead of tying gas tax revenue to consumption. Michiganians still would have to pay an 18-cent federal taxanda6percentMichigansalestaxoneverygallon purchased.

We may take issue with some of the details, but the state’s aging infrastructure presents a challenge that calls for bold action from policymakers. But what’s more important is that the governor has laid out an encompassing list of infrastructure changes Michigan needs, along with suggestions for funding them.

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