Transportation investment urgently needed to keep MI competitive
LANSING—Michigan’s aging roads and bridges pose a growing threat to our state’s economic vitality, according to a report issued by top business leaders today.
Speaking before state policy leaders, executives from Business Leaders for Michigan detailed how decades of underinvestment have created a costly set of challenges for the state’s transportation infrastructure.
“The deteriorating condition of Michigan’s roads poses huge challenges for our state’s future economic growth, not to mention our safety and overall quality of life,” said BLM president and CEO Doug Rothwell. “With consistently poor ratings and the worst rankings in the U.S., Michigan’s infrastructure demands swift, bold solutions that are built to last.”
According to BLM, the problem is growing in scope. While a 2015 road funding package will generate $1.2 billion when fully implemented, decades of deferred maintenance and deteriorating conditions will keep a sizeable funding gap in place unless further action is taken. Both the previous report issued by the 21st Century Infrastructure Commission in 2016 and one by Business Leaders for Michigan in 2017 identified a revenue shortfall of at least $2 billion per year, and experts believe the shortfall has grown since then as too few roads are being repaired.
“Today’s report highlights a number of promising approaches that have been helping shore up infrastructure in other places, and offers a set of sound policy principles for evaluating future solutions,” Rothwell said. “It’s not enough to keep pushing funds at this problem without defining sustainable, proven approaches that ensure we can get ahead of this issue once and for all.”
BLM announced its support for significant new funding to support long-term infrastructure solutions that meet the following policy principles:
- Regional and cross-functional coordination and resultant efficiencies should be rewarded.
- Public-private partnerships and alternative financing methods should be fully utilized.
- Funding should be sufficient to ensure at least good- and, ideally, best-quality conditions.
- Warranties on work should be required.
- Funding should be both sustainable and dedicated.
- Revenue should come from the users of the infrastructure, which means all of us. General purpose taxes (e.g., sales and income taxes) that fund the balance of state government should not be utilized.
- User fees should reflect the true cost of service, including the replacement or rehabilitation of aging infrastructure.
- A renewable bond program and/or regional assessment could be used to fund one-time or recurring needs that cannot be reasonably addressed through user-based funding. However, the revenue source should not adversely impact other critical priorities that help create jobs, such as job training, higher education and economic development.
“Simply put, we must become far more strategic about our infrastructure investments and there is no question at this point that strategy must involve new revenue,” Rothwell said. “For too long, we’ve been putting out fires. We need to lay out a comprehensive plan for fixing, maintaining and expanding our infrastructure so it supports our needs now and in the future. We are committed to working with Gov. Whitmer and the Legislature toward a long-term solution.”
BLM collaborated with Public Sector Consultants to research and deliver this report.
About Business Leaders for Michigan:
Business Leaders for Michigan, the state’s business roundtable, is dedicated to making Michigan a “Top Ten” state for jobs, personal income and a healthy economy. The organization is composed exclusively of the chairpersons, chief executive officers, or most senior executives of Michigan’s largest companies and universities. Our members drive nearly one-third of the state’s economy, provide 390,000 direct jobs in Michigan, generate over $1 trillion in annual revenue and serve nearly half of all Michigan public university students. Find out more at: www.businessleadersformichigan.com.