Doubling state spending on roads and bridges would create 15,000 jobs in Michigan while doing nothing would cost the state 12,000 jobs, according to an economic study released today.
The Lansing-based Anderson Economic Group also reported crumbling roads will adversely affect the state's top three industries -- manufacturing, agriculture and tourism.
Doubling the state's 19-cents-per-gallon gas tax and vehicle registration fees -- generating an additional $2 billion a year for transportation -- would add 34,000 construction, maintenance and spin-off jobs and eliminate about 19,000 jobs in service, retail and other industries due to the tax and fee hikes, the study concludes.
Conversely, the state would lose a net 12,000 jobs in construction and related businesses due to loss of federal match money for roads, as well as dwindling state and local dollars available for transportation projects if it stands pat on transportation funding, the report indicates.
"The message to policy makers is very clear. This study demonstrates the economic value to Michigan (by increasing spending on roads) in jobs alone is very significant," said Ken Sikkema, policy analyst for Public Sector Consultants Inc. "Greater investment in infrastructure is part of the reform agenda."
The report says traffic congestion due to bad roads costs an average of $287 per person. Doubling gas taxes and registration fees would cost motorists a similar amount, said Alex Rosaen, a consultant for the Anderson Economic Group and a co-author of the report.
If state lawmakers do nothing to increase road spending, the state will fall $84 million short of qualifying for $475 million in federal transportation match money, said Bill Shreck, spokesman for the Michigan Department of Transportation. But even if the Legislature figures out how to patch together a road budget that draws the federal match, the state will be $320 million shy of the money needed to maintain roads in their current condition, Shreck said.
Michigan spends $2.19 billion a year on roads and bridges. A commission set up by the Legislature and the governor in 2008 recommended the state spend twice that amount, $4.37 billion.
Lawmakers have been reluctant to raise the gas tax and vehicle registration fees in a down economy. It's also an election year for the House, the Senate, the governor and other statewide offices. The Senate boasted last week that it passed a budget for next year with no tax increases.
Rich Studley, president of the Michigan Chamber of Commerce, said if lawmakers do nothing to beef up road spending, "it means we begin to divest in our transportation system." He said the Legislature needs to act quickly to take advantage of the summer construction season.
"This problem is not going away," he said.
The chamber, which supports tax and fee increases to improve roads, paid for the Anderson study.
Studley said the recently passed Senate transportation bill is "not a satisfactory solution" because it siphons money from road maintenance and public transit to meet federal match requirements.
"There are people who want to solve this problem with smoke and mirrors, fairy dust and wishful thinking," he said.