Michigan will lose 12,000 jobs and the chance to revive its economy if state lawmakers fail to pump new investment into the state’s deteriorating transportation system, a study released today by the Michigan Chamber of Commerce found.

 

In contrast, doubling the state’s investment in roads and bridges could generate more than 15,000 good-paying jobs and pave the way for an economic turnaround, according to The Anderson Economic Group analysis of the economic impact of several road funding models.            

The study, “Michigan’s Roads: The Cost of Doing Nothing and the Rewards of Bold Action,” marks the first time economists have systematically connected transportation funding with key Michigan industries that depend on it – manufacturing, tourism, and agriculture.

 

“The results are clear and compelling,” said Patrick Anderson, principal and CEO of the Anderson Economic Group, based in Lansing. “Investing in our roads today would have a dramatic and positive economic impact for Michigan. The benefits would far outweigh any minimal cost increases to consumers through higher fuel levies, registration fees or other revenue sources that could be used to pay for needed road and bridge improvements.”

 

Anderson served as Gov. John Engler’s deputy budget director, authored the 1992 term limits constitutional amendment and drafted the 2002 initiated law that repealed the state’s unpopular Single Business Tax.

 

Money available to fix roads and bridges in the Michigan Transportation Fund has steadily declined in each of the last six years, due largely to more fuel-efficient vehicles and fewer new car purchases.

 

“Michigan’s economy will not fully recover without a first-class network of roads, bridges and transit systems – period,” said Rich Studley, president and CEO of the Michigan Chamber of Commerce, which commissioned the study.

“The three industries that support Michigan’s economy – manufacturing, tourism and agriculture – are directly tied to the condition of our roads and bridges,” said Studley.

 

The study also found that:

·       Poor road conditions are dangerous for motorists, increasing both the number and severity of accidents, as well as medical care and vehicle repair costs.

o   The cost of highway congestion (both fuel costs and value of time wasted) was $2.9 billion in Michigan in 2007, or $287 per person.

o   Medical costs involving poor road infrastructure resulted in $3,763 in medical costs per crash in Michigan in 2006.

o   The cost of vehicle repairs due to crashes involving poor road infrastructure was $542 million in Michigan in 2006.

·       For the first time, Michigan risks forfeiting $475 million in federal funds this year because it can’t come up with $85 million in state money to leverage the federal money, setting a dangerous precedent for the state. “The urgency is real – state lawmakers must act quickly to restore Michigan’s once-proud road system,” said Ken Sikkema, senior policy fellow at Public Sector Consultants, a Lansing consulting firm, and former Michigan Senate majority leader. “Every wasted moment means fewer jobs and dollars for Michigan, and more federal dollars for other states.”

The study found that urban roads in Michigan are in worse shape than those in neighboring Midwest states and below the national average.

“Allowing an infrastructure system that directly supports Michigan’s top three industries to further deteriorate would be a disaster for Michigan’s economy,” said Bill Shreck, director of communications for the Michigan Department of Transportation, who noted that the state’s gas tax has not been increased since 1997.

 

In contrast, doubling the state’s investment in roads and bridges could generate more than 15,000 good-paying jobs and pave the way for an economic turnaround, according to The Anderson Economic Group analysis of the economic impact of several road funding models.       

The study, “Michigan’s Roads: The Cost of Doing Nothing and the Rewards of Bold Action,” marks the first time economists have systematically connected transportation funding with key Michigan industries that depend on it – manufacturing, tourism, and agriculture.

 

“The results are clear and compelling,” said Patrick Anderson, principal and CEO of the Anderson Economic Group, based in Lansing. “Investing in our roads today would have a dramatic and positive economic impact for Michigan. The benefits would far outweigh any minimal cost increases to consumers through higher fuel levies, registration fees or other revenue sources that could be used to pay for needed road and bridge improvements.”

 

Anderson served as Gov. John Engler’s deputy budget director, authored the 1992 term limits constitutional amendment and drafted the 2002 initiated law that repealed the state’s unpopular Single Business Tax.

 

Money available to fix roads and bridges in the Michigan Transportation Fund has steadily declined in each of the last six years, due largely to more fuel-efficient vehicles and fewer new car purchases.

 

“Michigan’s economy will not fully recover without a first-class network of roads, bridges and transit systems – period,” said Rich Studley, president and CEO of the Michigan Chamber of Commerce, which commissioned the study.

“The three industries that support Michigan’s economy – manufacturing, tourism and agriculture – are directly tied to the condition of our roads and bridges,” said Studley.

 

The study also found that:

·       Poor road conditions are dangerous for motorists, increasing both the number and severity of accidents, as well as medical care and vehicle repair costs.

o   The cost of highway congestion (both fuel costs and value of time wasted) was $2.9 billion in Michigan in 2007, or $287 per person.

o   Medical costs involving poor road infrastructure resulted in $3,763 in medical costs per crash in Michigan in 2006.

o   The cost of vehicle repairs due to crashes involving poor road infrastructure was $542 million in Michigan in 2006.

·       For the first time, Michigan risks forfeiting $475 million in federal funds this year because it can’t come up with $85 million in state money to leverage the federal money, setting a dangerous precedent for the state. “The urgency is real – state lawmakers must act quickly to restore Michigan’s once-proud road system,” said Ken Sikkema, senior policy fellow at Public Sector Consultants, a Lansing consulting firm, and former Michigan Senate majority leader. “Every wasted moment means fewer jobs and dollars for Michigan, and more federal dollars for other states.”

The study found that urban roads in Michigan are in worse shape than those in neighboring Midwest states and below the national average.

“Allowing an infrastructure system that directly supports Michigan’s top three industries to further deteriorate would be a disaster for Michigan’s economy,” said Bill Shreck, director of communications for the Michigan Department of Transportation, who noted that the state’s gas tax has not been increased since 1997.