30 Apr 2014 adminPS
If elected I will propose the following or support legislation similar to:
Increase the gas tax by 30 cents per gallon, index it for future inflation and add a penny to the tax every time the average fuel economy of vehicles increase by a set amount. Leave registration costs alone.
Increase is huge and potentially political suicide. In reality, the gas tax is the only tax not automatically indexed for inflation-it has not changed in seventeen years. Oakland County’s road budget for 2015 is 7% less than for 2014.
This will raise approximately $1 billion per year and cost the average motorist $156 per year. It will also make sure we never have to put through another drastic gas tax hike. Michigan roads are in poor shape and available funding will not even allow Michigan to maintain the current poor condition of its roads. This is because road funding is based on a flat cents per gallon which has not changed since 1997. General inflation runs about 3% per year, so a flat per gallon tax effectively has cut the money available for roads by over half over the last 17 years. The average fuel economy of cars has increased significantly so the state road budget not only is being hit by the annual inflation increases, but the actual number of dollars coming in per mile driven has decreased.
The combination of better fuel economy and the non-inflation adjusted tax per gallon means the number of miles which can be paved, repaved, or repaired has fallen by 2/3.
The state legislature has two responsibilities:
One is to provide adequate funding for roads.
The other is to make certain this money is spent wisely. As a former Purchasing person, I realize how easily the cost per mile of road improvement can rise as contractors take advantage of a big influx in funding. As a former auto person, I realize it is not possible to double auto production in a year. It takes time to increase manpower to accommodate the increase. Roads also require time to adjust to a large funding increase. The state, county and local road organizations need time to hire enough people to correctly oversee the increased spending. This means the state banks some of the increase in a fund which cannot be raided by the general legislature. The legislature needs to keep a very tight leash on the County Road Commissions. If per mile building costs start rising, bidding is stopped, and/or we bring in bidders from other states to keep strong competition.
Also—do we have the right asphalt/concrete mix? The state has been in an emergency repair mode for years because of dwindling funds which favors asphalt over concrete. The increased price of oil has made asphalt verses concrete a possibly non-optimal allocation. Once the state establishes stable, adequate road funding, it can direct the optimal asphalt/concrete mix.
Comparison of Michigan’s roads with a home with a leaky roof.
Michigan’s roads are similar to two homeowners who have a roof which needs to be replaced. A new roof costs $4,000. One homeowner has $3,000 in the bank and one has $10,000 in the bank. The first homeowner is forced to fix only the holes at $800, then $900 for the next year’s holes, and a $1,000 for the third years holes, etc. The second homeowner pays $4,000 for the new roof and will not spend another penny for twenty years. The first homeowner is in a downward death spiral and will eventually lose his house. The second homeowner had the resources to take the financial hit and stays in his house and eventually rebuilds his finances. Michigan roads are in the death spiral of the first homeowner. The state must increase taxes in order to have the funds to make the financially prudent long-term decisions.
The state must look closely at two projects and use common sense:
(1) A proposed $800 rail project from Downtown to the State Fairgrounds at Eight Mile Road. This does not make sense and will require large annual subsidies. Expanding the people mover to the New Center area should be done only if it is not only privately financed, but private financing is put in place to cover the annual subsidies required to run the system.
(2) A twenty year, $1 billion project to increase South Oakland County I-75 capacity is being driven by a grandiose high occupancy lane plan. I -75 in Southern Oakland County has needed a fourth lane for thirty years. Fourth lanes were added to I-696 west of Telegraph and I-75 north of Square Lake Road in one construction season. Michigan can build this fourth lane by financing it for less than the state contribution required for the billion dollar federal project, and can build it in a fraction of the time.