Reform legislation would boost funding

A bipartisan package of bills has been introduced in the state House and Senate to generate more revenue for road construction and maintenance, including a hike in annual vehicle registration fees and a restructuring of the state’s gas tax.

The bills come on the heels of a plan unveiled by Gov. Rick Snyder to the state Legislature in October. The bills — 15 introduced in the House and another 15 in the Senate — would garner more dollars for Michigan roads and bridges, create a regional transit authority, and impose best practices, among other initiatives. The majority of bills deal with a new funding mechanism in order to raise an additional $1 billion annually to fix Michigan’s deteriorating infrastructure.

“We’re starting a conversation on roads and doing it in a way that’s best,” said state Sen. Mike Kowall (R-Commerce, Milford, Highland, White Lake, West Bloomfield, Orchard Lake, Wixom, Walled Lake and Wolverine Lake). “No. 1 is what can we do better with Michigan Department of Transportation (MDOT) funding and what can we do in the future.”

The increase in vehicle registration fees would yield roughly $500 million a year. The hike in fees would be based on the list price of the vehicle at the time it was purchased or the weight of the vehicle, depending on the bill and the type of vehicle.

“It’s not as large of an increase as proposed in October by the governor — it’s a sliding scale where (owners of) more expensive cars will pay more,” said Southeast Michigan Council of Governments (SEMCOG) Policy Advisor Bob Morris.

According to SEMCOG Director of Transportation Carmine Palombo, the legislation calls for an increase in the registration fees that must be approved by voters.

“It identifies the maximum that can be imposed and must be approved by the voters in that county,” Palombo said.

While the Road Commission for Oakland County (RCOC) sees the legislative package as a positive step in acquiring more road funding, there are some underlying concerns.

“We have mixed feelings,” said RCOC Spokesperson Craig Bryson. “In one sense, the governor and the Legislature are taking some serious action to address the road funding crisis, but we’re not sure these are steps we would have encouraged them to take, like the vehicle registration fee, as a viable option.”

A new gasoline tax paid at the wholesale level would result in a net increase of 9 cents per gallon at the pump for motorists and is estimated to rake in $541 million a year. The current 4-cent discount on the tax paid on diesel fuel would be eliminated, with the new, higher diesel tax also shifted to the wholesale level, according to Morris.

“It’s critical we look at this now,” Kowall said. “We’re not on life support yet, but it’s not good either. We need to examine and reassemble how we do business.”

Still, Kowall said he wants to remain conscious of Michigan residents who continue to grapple with financial difficulties.

“Before raising costs on people we need to be aware of the people struggling financially — this doesn’t constitute an immediate tax increase,” Kowall said.

Schools would continue to receive revenue from the gas tax, with the balance dedicated to roads.

“No one wants to adversely affect education,” Kowall said.

Other ancillary bills related to best practices are expected to facilitate efficiencies to save money. All road projects could be subjected to a competitive bidding process. Currently, only projects exceeding $100,000 are required to be advertised for competitive bids.

Furthermore, counties would handle local road programs in communities with road budgets under $50,000.

“Realistically there are only two to four communities that would be impacted in Oakland County — it would apply more to small towns in rural areas,” Bryson said.

One bill would establish a regional transportation authority (RTA) for Wayne, Oakland, Macomb and Washtenaw counties that would be empowered to spearhead a mass transit plan.

“An RTA was set to be established when (former Gov. John) Engler was in office and then he vetoed it his last day,” Palombo said. “An RTA would go to the people and attempt to get funding for bus rapid transit.”

State hearings on the bills are expected to be scheduled between the House and Senate transportation and appropriations committees.

“These are to get a feel of how residents feel about the legislation,” Morris said. “Most polling indicates that people recognize we are not investing in our infrastructure like we ought to be.”