MDOT director wants to change how road money is shared

Plan to reallocate road money circulating

LANSING - The state would scrap its decades-old formula for dividing up road funds between state and local governments,  under a draft plan being circulated by Michigan Department of Transportation Director Kirk Steudle. The plan calls for moving to a simpler formula based more on how much funding is needed for specific roads, rather than who owns the roads.

"The public doesn't care who owns it," Steudle told the Free Press. "They just want the roads fixed."

Related: Officials say 2017 road money boost smaller than claimed

Among other changes, the plan would reduce inequities, Steudle said. It would rely less on population and more on miles of road when doling out funding, and place greater emphasis on the importance of the road being funded.

Also, bridges would be included in the road funding formula for the first time, and there would be greater emphasis on assigning appropriate and adequate funding to all public roads, rather than adhering to a formula that dictates certain percentages of the money for various levels of government, Steudle said.

Local players and the state wouldn't lose any funding  under the new funding formula, because 2015 funding levels would be used as a base, with money in excess of that base amount distributed using the new method, Steudle said. "Nobody goes backwards," he said.

The proposals, which Steudle stressed are at the preliminary discussion stage, are set out in a two-page draft Steudle discussed in the last couple of weeks  with Republican lawmakers and groups such as the Michigan Municipal League and the County Road Association of Michigan.

John LaMacchia, assistant director of state and federal affairs for the Michigan Municipal League, said his group is studying Steudle's proposal, and "we anticipate being prepared to have a robust conversation on how we think that formula should look, and with information to support those arguments."

If population is less heavily weighted in determining the road funding split under the new formula, that doesn't necessarily mean the change would disadvantage cities, due to the other factors being considered, he said.

The bottom line is, "We need to invest in existing infrastructure," he said.

Related: Despite road deal, Michigan to spend less on freeways

Republican Gov. Rick Snyder has called for simplification and other changes to the complex road funding formula, which is set out in Act 51 of 1951.

Steudle's draft plan would also move Michigan away from a homegrown method of classifying roads by type to a standardized federal method that classifies roads by function.

The MDOT director doesn't expect legislative action before next year.

"This is not about tweaking what we have," he said. "This is a wholesale, 'Let's start over.' I've had some good positive feedback," but he expects whatever is finally approved will look different.

Under the current formula, after some initial allocations of road dollars, the Michigan Transportation Fund is split through a formula in which 39.1% goes to the State Trunkline Fund, 39.1% goes to county road commissions, and 21.8% goes to cities and villages. The ultimate allocation is largely based on population.

That formula would be abolished, with the money instead split based on the type of road, bridge deck area, and population.

Phil Lombard of Ferndale, a retired military officer who was interested enough in the draft proposal to request a copy of it from the Legislature, said it's too soon for him to assess the proposal, but he likes the fact it's taking bridges into consideration.

"I do like that they are paying attention to funding for bridges."

While 2015 funding would be used as a base, the plan could affect how extra funds from last year's $1.2-billion road funding deal are doled out.

The plan, narrowly approved by the Legislature and signed into law by Snyder last November, doesn't devote a full $1.2 billion to transportation until 2021, although many motorists and interest groups say major road fixes are overdue and needed immediately.

Under the plan, the annual cost of a $100 vehicle registration will go up by $20, and the cost of a 15-gallon fill-up will increase about $1.10 with a 7.3 cent-per-gallon increase in the fuel tax, now 19 cents per gallon. The package also increases the tax on diesel fuel — now 15 cents a gallon — to match the price of regular fuel, bringing both taxes to 26.3 cents per gallon on Jan. 1. Once the plan is fully implemented, the fuel tax will increase annually by 5% or by the inflation rate, whichever is less.

Starting in 2019, the plan calls for use of general fund money to pay for roads, with a phase in capped at $600 million per year, starting in 2021.

(2016 © Detroit Free Press)


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