Lawmakers will do Gov.-elect Rick Snyder no favor if they adjourn their lame duck session on Dec. 2, as projected, without resolving a funding shortage that could slash the state's road construction budget in half by 2012. He doesn't need that headache on top of government and state business tax reforms facing him and the Legislature as soon as they arrive in Lansing in January.
Falling state gasoline tax income, a trend over the past decade, could shrink Michigan's 2012 road repair budget to $626 million, according to projections by the Michigan Department of Transportation.
That would be a dramatic plunge from the $1.4 billion currently being spent on road repairs and would be the first sub-$1billion annual expenditure on road construction since ex-Gov. John Engler reluctantly signed off on a 4-cents-per-gallon boost of the state gasoline tax in 1996.
State gasoline tax revenues, coupled with vehicle registration fees as the revenue stream supporting roadwork, peaked at $931.7 million in 1999.
By next year, they will be down to $826 million while the costs of concrete, steel and asphalt are headed in the opposite direction. Higher fuel efficiency and less driving by motorists, who've been pinched by high fuel prices, are blamed for the revenue decline.
Michigan was in danger of coming up $84 million short on matching funds necessary to receive its full allotment of federal highway money for 2011, until lawmakers patched together a temporary fix that included a $40-million one-year loan. State road funding also got a temporary shot in the arm from the federal stimulus program, which ends this year.
Without a permanent solution to the revenue inadequacies, Michigan can expect to see further declines of $120 million to $160 million from 2012-15 and lose out on $575 million to $800 million per year in federal road repair funds. The $40-million loan, if it truly has to be paid off in 2012, only adds to the projected shortfall. There's no mystery about the impact all of this would have on the condition of state roads.
There's pending legislation to boost the 19-cents-a-gallon gasoline tax. That is an unpleasant prospect, but it's the only realistic solution that has been offered. It's justifiable on the basis of users paying in proportion to the value they receive from good roads. It's also a sound investment that will pay off in new business and new jobs for our state.
This is a problem that has grown up on this legislature's watch. Lawmakers need to fix it now, not punt it to a new governor who'll have his hands full with other issues.
From The Detroit News: http://detnews.com/article/20101128/OPINION01/11280306/Fill-the-funding-pothole-by-raising-the-gas-tax#ixzz16ga9uhyB