A Reality Check on Road Funding

When the Michigan Legislature passed the new road funding legislation in November, much of the battle focused on how much citizens would tolerate in new taxes. What was often lost in debate was how much revenue was needed to support our transportation system.

When (or if) the plan is fully implemented, it will generate an additional $1.2 billion per year in revenue for our transportation needs. MDOT estimates that it will see about $300 million more per year for maintaining our freeways and other state trunkline roads compared to its current funding level.

The legislature added some specific directives requiring MDOT to devise a strategy to construct roads that will last longer and be less expensive in the long run. The objective is for roads to last 50 years, and the overall cost of building and maintaining a road be cut in half over that time period.

A clause also stipulated that the condition of the roads could not deteriorate below the current level over the next 10 years and that all state roads must be in good or fair condition by the end of 2025. Currently, 15 percent of state roads are in poor condition using the PASER standard. It should be noted this is far better than the condition of local roads in the state.

Three weeks ago, MDOT submitted its report to the legislature. The results were not pretty. Under the best-case scenario, freeways and highways in the state are expected to go from 15 percent in poor condition to 46 percent in poor condition in the next decade. That’s just a little short of the zero percent mark that the legislature was expecting. We have a lot of roads in fair condition that will fall into poor condition soon.

So, here is what the numbers show. Currently, it costs approximately $2 million to reconstruct an average lane mile of state road. The state has jurisdiction over 30,000 lane miles of freeways and highways. County road commissions, cities, and villages must deal with the other 200,000 lane miles of roads in our state.

The legislative solution to the shortfall was to give the department an additional $300 million more per year. If all that money is put back into the freeway system, we will come much closer to having the money necessary to replace a road once its functional life has expired. The system kind of – sort of – will be closer to matching the need…if we are real lucky.

However, the legislature wants a big change in constructing roads. It wants the improved freeways to last 50 years. Currently, our freeways are built with a design life of 20 years and, with proper maintenance, have an estimated functional life of around 33 years. The MDOT report evaluated the cost of the legislative mandate. The department’s best estimate is that a freeway with a design life of 30 years, instead of the current 20 years, could be maintained to have a functional life of 50 years.

The problem is that the cost to construct this type of freeway would increase from $2 million per lane-mile to $3.7 million per lane-mile. That would drive up the cost to replace the current freeways and highways from $60 billion to $111 billion. Assuming the state would be spending around $1.8 billion per year means it will take 62 years to have enough money to replace our current freeway system. That’s a problem when the current roads only last 33 years.

Of course the legislature has the answer – we just need to cut the cost of construction by 50 percent. MDOT continues to look across the country and even internationally for an example of where that has worked.

A reality check is needed. Yes, we can build roads to a higher standard, but it will cost much more than we are currently spending. Should we spend 85 percent more to increase the life of a road by 51 percent? Or should we spend the extra money to perform additional maintenance to extend the life of what we have? What’s the better solution?

The Transportation Asset Management Council was established in 2002 under state law to guide state and local road agencies on how to spend road dollars to get the best overall result for our road systems, given the revenue limitations. This program is seen as a national model. Perhaps we should be looking to them to assist in determining the best direction to take.

We all wish our roads were in better shape, but even at an additional $1.2 billion per year, it will be many years before we see the overall system improving. It’s unfortunate, but it’s reality.