As Michigan’s road costs rise, experts say current funding method ‘isn’t working’

• A Citizens Research Council of Michigan report argues the state must revamp its current road funding efforts for the modern age
• In a report published Tuesday, the group argues Michigan ranks 40th in terms of road conditions by state and 30th in road funding levels
• The report comes amid negotiations between state House Republicans, who say they have a plan to fund road fixes, and Gov. Gretchen Whitmer

LANSING — As Michigan ranks 40th nationally in terms of road conditions, the cost of repairing Michigan roads has nearly tripled over the last two decades, prompting some to call for rethinking how the state allocates its funding.

But to do that, lawmakers would first need to repeal a nearly 75-year-old law known as Public Act 51 that governs how the state spends its road-related dollars, replacing it with new legislation that provides a “rational formula” for distributing funds “based on the needs of today’s transportation system and citizens,” according to an 86-page report from the Citizens Research Council of Michigan. 

While the group stopped short of prescribing its own idea of how best to fund Michigan’s roads, officials argued the state must reevaluate its permitting process for mining road materials and give local governments the ability to implement their own local options for repairing state roads that run through their communities, among other things.

That’s because the way Michigan funds its road program was never meant to extend into the 21st Century, argues Eric Paul Dennis, an associate researcher of infrastructure with the Citizens Research Council, noting “we have ways of understanding funding needs much better now than we did in 1951,” the year Michigan’s current road funding apparatus became law. 

“This law just isn’t working for Michigan, and I think it’s beyond repair,” he said. “We should start from whole cloth by considering what an appropriate, 21st century road program should look like.” 

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Speaking with reporters at a press conference Tuesday, Dennis said that, because of the way state law is currently structured, “we spend too much time thinking about funding, and not enough time thinking about how that funding is spent.” 

The state has steadily increased the amount it pours into roads and bridges — jumping from $2.6 billion in 2004 to $6.1 billion in 2024 when including Gov. Gretchen Whitmer’s road bonding plan — with little to show for it, Dennis added. Even when not including the bond funding, Michigan is spending the most it has on roads since at least 2004, when adjusted for inflation.

Per the council’s report, when comparing data from 2012 to 2021, Michigan ranks 30th among all 50 states in road funding levels and 40th in road conditions, giving the state an effectively failing grade.

“Funding is only one factor that determines condition of a road system,” Dennis said. “What you do with that money appears to be far more important.”

He also noted the state’s estimation for how much it should be spending yearly on repair roads, often quoted at around $3.9 billion, should be “critically reviewed,” as it is “based on a subjective metric, inaccurately forecast into the future.”

Dennis could not give a definite figure as to how much yearly the state should spend to keep Michigan’s roads in decent condition, other than to acknowledge that he believed the real figure “would almost certainly be lower.”

An official with the Transportation Asset Management Council, an independent body focused on objective data and the condition of the state's roads and bridges, directed Bridge Michigan to its 2023 Roads and Bridges Annual Report when asked for comment on the possibility of repealing Act 51.

State House Republicans earlier this month passed a roads plan that would pump more than $3 billion a year into road repairs but gut key economic development programs and force spending cuts in other areas.

The Republican plan includes:

• Replacing the 6% sales tax on gasoline with an inflation-pegged 20-cents-per-gallon increase in the motor fuel tax, an increase that would be directly sent to roads and equals about $1 billion per year.
• Earmarking $2 billion a year from the corporate income tax to roads, with 90% going to local agencies. That would grow to $2.2 billion after 2030.
• Ending funding for economic development programs Whitmer has championed, including $550 million for the Strategic Outreach Attraction Reserve Fund.
• Effectively pushing recipients of Michigan Economic Growth Authority tax credits away from the subsidies by increasing the tax rate they’d pay under them to 30%.

Meanwhile, Whitmer has proposed her own roads plan — namely, securing a majority of the funding through new taxes on major businesses and marijuana — but Democrats have yet to introduce legislation to enact that plan.

Whitmer’s office has since criticized the Republican plan, with press secretary Stacey LaRouche telling Bridge the House plan “does not achieve” the goal of sustainable, long-term road funding. 

“The governor is open to suggestions from Republicans and Democrats, but inaction is not an option,” LaRouche said earlier this month.