Report: Michigan must spend billions more a year to modernize infrastructure

LANSING — Michigan needs to come up with at least $4 billion more per year if the state is to close a gap in spending on its infrastructure needs, according to a report to be released today by a commission formed to study the issue.

The 21st Century Infrastructure Commission, appointed by Gov. Rick Snyder, concluded that the state would need to spend in excess of $60 billion more over 20 years just to fix existing infrastructure systems. (That would come to something over $3 billion a year, not $4 billion; a spokesman for the commission said $4 million more is needed in the first years but the amount might fluctuate in later years).

The commission and Snyder plan to release the full report at an event this morning in Dearborn.
In addition to the price tag, the report’s executive summary is also notable for what is not mentioned. Through seven pages of recommendations on updating roads, bridges and water systems, including three mentions of the need to modernize the Soo Locks, there is not a single reference to Flint. That city’s drinking water was poisoned as a result of government failures, and the resulting uproar was the impetus for evaluating the state’s overall infrastructure needs. The summary does make references to replacing aging water systems, however.

Among the state’s critical shortcomings related to infrastructure — including roads, drinking water, sewers and storm systems, energy transmission and broadband Internet — is the fact that it doesn’t have a statewide database that can keep track of numerous systems, nor does it coordinate planning well among various governmental agencies, according to an executive summary of the report released to Bridge and Crain’s.

There are infrastructure systems in the state that are essentially unknown, said S. Evan Weiner, the commission’s chairman and chief operating officer and executive vice president of Detroit-based Edw. C. Levy Co., a construction materials conglomerate that specializes in such areas as steel mill services and road construction.

Before infrastructure managers can develop solutions, he said, they need to have data at their fingertips — where infrastructure systems are located, what condition they’re in, how old they are.
“We put the facts out there,” said Weiner, who added that the commission developed more than 100 recommendations. “We went right to it and we said, ‘Here’s the problem. Here’s what it’ll cost to fix it.’

“We can’t be scared of a big number,” he added. “We’ve got to prioritize what we need.”

Snyder tasked the 27-member commission, which was announced in his State of the State address in January, with recommending policy solutions to fix Michigan’s crumbling infrastructure. Michigan ranked last in the nation for its infrastructure — a grade of D — on the American Society of Civil Engineers’ last state infrastructure report card in 2009.

This isn’t solely a Michigan problem, either. The Reston, Va.-based engineering group estimated that only 57 percent of the $3.3 trillion in infrastructure repairs needed nationwide by 2025 are funded.

Still, the report noted, Michigan devotes a smaller percentage of its overall spending on infrastructure needs than other states. Citing U.S. Census data, the report summary said Michigan spends 6.4 percent of total expenditures on state and local capital spending. The U.S. average is 10.2 percent, the report said.

The commission’s report suggests the need is large, though Weiner said it’s not insurmountable. Many of the state’s 1,390 community water systems are at least 50 years old, according to the report; it said 11 million jobs would be lost across the U.S. if the Soo Locks went down for six months, 1,200 bridges are structurally deficient and nearly 500,000 households don’t have broadband Internet access.

The group recommended:

• Creating an asset management pilot database in a region of the state to collect and report data on the condition of infrastructure systems.
• Forming a Michigan Infrastructure Council, a statewide clearinghouse for data on infrastructure systems. It would be responsible for maintaining the asset management database, coming up with a long-term strategy and priorities and finding funding.
• Finding a sustainable funding model that could rely on a mix of user fees, private-sector investment and government dollars to pay for repairs.
• Using updated technology to create efficient infrastructure systems and aid planning.
• Replacing aging water systems, from drinking water to sewers, while investing in environmentally sustainable ways to manage storm water.
• Building a new lock in Sault Ste. Marie within the Soo Locks system.
• Investing in cybersecurity and intelligent vehicle systems.

“Our state’s infrastructure challenges are serious and wide-ranging, and we need to act with urgency to improve our infrastructure systems and make Michigan an even better place to live,” Gov. Rick Snyder said in a statement.

“Safe and reliable infrastructure is critically important to the health and wellbeing of the people of Michigan and will help support our growing economy in the future. Our state is poised to be a global leader in emerging technologies as we move forward in the 21st century, so it is essential that we have the infrastructure to match our goals.”

Snyder proposed depositing $165 million into a new state infrastructure fund this year; the Legislature opted to contribute $5 million during this year’s budget process.

Michigan’s general fund will continue to face competing spending pressures, especially once a road-funding package adopted last year is fully funded in 2021, Weiner said. That plan requires half of its $1.2 billion price tag to come from existing spending.

As the economy improves, it makes sense to use some general fund money as seed funding for an infrastructure bank or to secure matching funds if the state can afford to do so, Weiner said. The commission did not try to suggest how much money would be needed or how it should be spent, he added, preferring to leave that decision to policymakers.

“We really need to have user-pay principles, and we really need to have leverage with the low-interest environment that we have,” Weiner said. “We really need to find federal (and) other mechanisms and means to reach the people that are willing to pay for these additional services.”