Michigan roads: how bad are they, how are they funded, and how on Earth can they be fixed? | Michigan Radio
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Michigan roads: how bad are they, how are they funded, and how on Earth can they be fixed?

Jan 29, 2020

It is a fact universally acknowledged that Michigan has terrible roads.

Well, unless you are state Senate Majority Leader Mike Shirkey (R-Clarklake), who said this month that he is not convinced there is a need for new road spending.

While there are a lot of arguments to be had about how to actually fix the roads by politicians and policy advisors and opinion columnists, there are some facts about Michigan’s roads that are indisputable.

Here’s what you need to know about the quality of Michigan’s roads, how they’re funded, and proposed solutions.

Just how bad are the roads?

Michigan has approximately 120,000 miles of paved roadway. Roads are classified into two categories: federal-aid roads, and local roads. There are about 88,000 miles of federal-aid roads in Michigan, which are defined as freeways, arterials, minor arterials and major collectors. That includes almost all state highways, and approximately 30,000 miles of major county roads and city streets.

The Michigan Transportation Asset Management Council (TAMC) carries out an annual analysis of the quality of Michigan’s roads. In brief: the roads are bad, and getting worse. In 2017/18, 41% of federal-aid roads were classified as “poor.”

Credit Michigan Transportation Asset Management Council

Compared to the rest of the country, Michigan’s highways are average. In a 2019 assessment by the U.S. News and World Report, Michigan ranked 30th overall in federal-aid road condition.

The state isn’t required to rate local, non-federal aid roads, but 79 local road agencies submitted ratings for 16,968 lane miles of non-federal-aid roads in 2018. Of those, 53% were rated “poor.” Since that is only a fraction of local roads, TAMC determined “it is probably safe to assume that, as a class, non-federal-aid roads are in worse condition than federal-aid roads.”

Read more: The best and worst roads in Michigan

Like other Great Lakes states, Michigan is particularly vulnerable to the cycle of freezing and thawing that plagues paved roads, so the problem of deteriorating roads is a constant battle. So as Michigan continues to fall behind on road repair and reconstruction, the overall condition of the roads is expected to grow worse.

How are Michigan’s roads funded?

Michigan’s roads are primarily “user-funded.” Drivers pay gas taxes and vehicle registration fees, and that money is put in the Michigan Transportation Fund (MTF).

Vehicle registration fees are calculated based on a car’s MSRP. The percentage paid decreases for a new car’s first three years, and then remains constant. In other words, people who buy expensive cars (or cars that used to be expensive) pay a higher registration fee than those who buy less expensive cars. Other states have flat fees, or they calculate vehicle registration based on the weight of the car or even a car’s horsepower.

There are three taxes you pay on gas: a federal gas tax of 18.4 cents per gallon (24.4 cents for diesel), a state gas tax of 26.3 cents per gallon and the six percent state sales tax. The state gas taxes go directly into the MTF, and the federal tax goes to the state and is used to fund federal-aid roads.

The sales tax, however, goes into the General Fund. Michigan is only one of five states that charges sales tax on gas purchases, meaning some of the tax paid on gasoline doesn’t go back into the roads.

Traditionally, the gas tax was the largest source of MTF revenue, but vehicle registration fees have surpassed the gas tax in recent years. Gas consumption is dropping, and as cars become more fuel-efficient, the revenue from gas taxes will continue to decrease accordingly.

Credit Emma Winowiecki / Michigan Radio

The money collected by vehicle registration and gas taxes is distributed to a variety of other funds.

Some MTF money is removed right off the top and distributed to things such as the DNR Recreation Improvement Fund, bridge and railroad grants, and administrative costs.

A formula is used to split the remainder of the MTF to county road commissions (39.1%), cities and villages (21.8%), and the State Trunkline Fund (39.1%). Each of those also receives some additional revenue — county road commissions and cities/villages both get some money from the Local Program Fund, for example.

What are some possible solutions?

There have been many arguments over the years about how to better fund roads in Michigan.

Toll roads are often thrown around as an option. Illinois, Indiana, and Ohio all have tolls on their busiest roads, which frees up money from gas taxes and vehicle registration to be spent on local roads.

Toll roads were nearly a possibility for Michigan. In the 1950s, the Michigan Turnpike Authority was established to build turnpikes on what would become I-96 and I-75. But at the time, federal aid and a gas tax was enough to fund the creation and maintenance of state roads, so turnpikes were turned down.

The idea hasn’t gone away, though. The Michigan state Senate approved a measure Tuesday that would require a feasibility study for toll roads, because while there is some support for toll roads, there are many potential downsides. As MDOT explains:

Cash tolls mean delay and increased operating cost. Cash tolls are expensive to collect, consuming 13 to 17% of revenues. Toll roads usually have fewer interchanges - a different design philosophy from Michigan freeways. Tolls divert traffic to parallel routes, risking neighborhood impacts. Tolls may discourage tourism and business location. Plus, people hate toll roads.

In her 2019 budget, Gov. Whitmer proposed a gas tax increase that would raise the rate to 71.4 cents per gallon. She argued that cost would be less than what Michiganders pay to fix flat tires and car repairs made necessary by poorly maintained roads. That proposal was not adopted by the Republican-controlled state Legislature.

Others have suggested eliminating the sales tax added to gas purchases, so the gas tax could be raised without raising the actual price for consumers.

Fixing the damn roads remains a key goal for the governor.

In her 2020 State of the State, Whitmer is expected to declare that she doesn’t need the Legislature’s permission to fund the road crisis. How is that possible? Bonds. Road bonds.

The governor cannot unilaterally issue new bond debt, but there’s a work around to that: the State Transportation Commission can authorize the Department of Transportation to issue bonds against its constitutionally restricted funding.

According to Gongwer News Service, “It is not yet clear if she will announce in the speech the amount of bonds she will ask the State Transportation Commission to authorize, but the governor is expected to declare she will not wait for the Legislature to pass a road funding proposal.”

Whitmer is expected to pursue the sale of $3.5 billion in road bonds over the next three to four years. The bond money could only go into the State Trunkline Fund, which would free up more MTF money to go into county road commissions and cities and villages.

Senate Majority Leader Mike Shirkey has said the bond option is one that he would prefer not to consider, but isn’t completely off the table. 

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