What happened: Michigan Gov. Gretchen Whitmer (D) Nov. 16 spoke with the Detroit Free Press about her administration’s plans to revamp the state’s transportation funding system amidst growth in electric vehicles (EVs). Michigan currently gets most of its road funding from motor fuel taxes, registration fees, and general fund transfers. The state also uses bonding as a funding mechanism. In 2020 Gov. Whitmer’s $3.5 billion transportation bond proposal won unanimous approval from the State Transportation Commission.
Why it matters: A study released in March 2022 by the Mackinac Center for Public Policy estimated gains in fuel efficiency would lead to $1 billion in annual revenue shortfall by 2050. The study recommended moving away from tax-based revenue sources towards a user-fee system that charges drivers based on how much they drive. ARTBA state chapter affiliate, The Michigan Infrastructure &Transportation Association (MITA), has also continuously pushed for long-term solutions to transportation funding. MITA’s FixMIState campaign educates Michigan voters on unmet infrastructure needs and is conducting research on how to address funding shortfalls.
What’s next: Whitmer, whose party will control both chambers of the state legislature next year, pledged not to raise the state’s gas tax. She instead signaled the need for an entirely new approach to funding, saying, “I think Michigan could show the world what a real solution looks like, but it’s not going to come from one person. It’s going to have to be a stakeholder-inclusive, bipartisan effort to really design an infrastructure system that is comprehensive and resilient and can last.”
Resources:
ARBTA-TIAC story on 2020 Michigan Bond Approval.
ARTBA-TIAC story on a June 2022 FixMIState survey on infrastructure investment.