Michigan's roads need to be fixed. The Michigan Department of Transportation (MDOT) says they do. The governor agrees and so do legislators of both parties. Studies from independent organizations make the same case. But I don't need public officials or studies to convince me that the roads are falling apart.
For years, I've made a habit of keeping a notepad in the front passenger seat of my car when I'm driving alone. People to call, places to go, things to do-I can fill several pages with that stuff on a two-hour road trip. The problem these days is that when I get home, I can't read my own notes anymore. They look like a blind man's scribblings on an Etch-a-Sketch. That's how I know that Michigan's roads need to be fixed.
Maintaining Michigan's 118,000 miles of highways and roads is crucial to the state's economic progress but how to pay for them is a question that has vexed Lansing for months. Proposals for hiking the 15 cent-per-gallon gasoline tax are bogged down over how the revenue should be split between the counties and the state. Many people argue that if the gasoline tax is raised, other state taxes and spending should be correspondingly cut so that Michigan's overall economic competitiveness is not hurt.
While the discussion continues, so does the deterioration and its mounting bills. Because fixing "poor" roads is three to five times more expensive than fixing those rated "fair," it makes economic sense in the long run to invest in halting the deterioration of roads before they become poor. The legislature and the governor will have to resolve the funding problem soon.
In the meantime, the Michigan Department of Transportation is trying to get more bang for the bucks it has, and is adopting many recommendations made in a 1995 report from the Mackinac Center for Public Policy. For example, MDOT is continuing to streamline its operations and reduce staff size. It is speeding up its efforts to privatize certain functions to save money. It is attempting to sell 700 miles of railroad track it doesn't need. It is developing better standards for road and bridge design. MDOT is pushing for fairer and less costly land acquisition rules. And, MDOT is making a better case in Washington that Michigan's share of federal transportation dollars is nothing less than "highway robbery."
Of the funds disbursed from the federal Highway Trust Fund for actual highway purposes, Michigan gets back the smallest percentage of what it pays in of almost any state in the nation. In 1992, for instance, the federal government collected $698 million in fuel taxes within Michigan, and returned a mere $382 million. We are one of 37 states that would benefit if Congress repealed the federal gasoline tax and let each state take care of both tax collection and road expenses for all but the Interstate system-an idea actually introduced in the U.S. Senate by Senator Mack of Florida.
Neither Congress nor the state legislature is likely to settle the transportation funding question before the November elections. That doesn't mean, however, that we can't make progress in the meantime. When the legislature returns from its summer recess, it can take care of a few issues that will move Michigan in the right direction:
Enact Tort Reform. State liability for accidents greatly affects the cost of building and maintaining Michigan's roads. Michigan paid out $191 million in tort claims between 1981 and 1994, $12.4 million in 1994 alone. MDOT is exposed to highly unpredictable liability for accidents in which a highway defect is alleged. While true negligence by the state should indeed result in liability, the current system encourages frivolous claims and excessive payments. According to Wayne State University's Dr. John Taylor, Michigan could save between $5 million and $10 million each year if the legislature simply improved the legal definition of the state's liability and enacted reasonable caps on "pain and suffering" awards.
End the Diesel Discount. Michigan's gasoline tax has remained at 15 cents per gallon since 1984, while the diesel fuel tax has stood at 9 cents per gallon since 1982 when a 6-cent discount for truckers took effect. Under the "user fee" principle, 9 cents per gallon does not pay the full share of costs imposed by trucks on Michigan roads. Repealing the discount would put the diesel fuel tax on a par with the gasoline tax and raise about $25 million annually. The state could then eliminate its diesel fuel discount sticker program, which would reduce the regulatory burden of the Treasury Department and cut registration expenses for Michigan-based trucking companies. Reductions in other taxes now or later would reduce any negative impact of a higher diesel fuel tax.
Repeal Prevailing Wage. Beginning in 1965, the state's Prevailing Wage statute required that workers on construction projects receiving state funds be paid inflated, union-scale wages and benefits. A federal district court recently struck down the state law on the grounds that federal law preempts it, but Attorney General Frank Kelley is appealing. Meantime, MDOT is cutting costs by putting contracts up for bid without prevailing wage provisions, but the legislature should settle this issue once and for all. By repealing this special interest legislation, Michigan can count on saving at least $6 million in transportation costs every year.
Michigan's crumbling roads need attention. More than attention, they need repair. The legislature should rise to the occasion and start to take some action.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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