How do we spend $175 million?

I recently heard one gubernatorial candidate on a radio show talking about the things he would do if he were elected governor. In reference to the recent action by the legislature to appropriate an additional $175 million for road improvements this year, he said that is not enough and that he would work with lawmakers to provide additional dollars. While he is on the right track, what he said next bothers me. He said that the most that money would improve is 175 miles of road! Not even close!

Unfortunately, this tells me that we have done a terrible job of educating lawmakers and the public in general about how funding is allocated in our state. While $175 million is a lot of money by anyone’s standards, it doesn’t go very far once it is distributed according to the formulas in Act 51.

Let’s start with some basics. There are 619 agencies in the state of Michigan that own roads – 83 county road agencies, 535 cities and villages, and the Michigan Department of Transportation (MDOT) – and receive road funds. Each of these entities gets a piece of the $175 million, but how much? Well, let’s explore that.

Where does Act 51 money go?

The first thing that happens? The dollars get split in the following manner by the state’s agreed-upon formula. Here is that formula as it relates to the $175 million in question:

• MDOT receives 39 percent of the dollars, or in this case, $68.3 million;
• The 83 county agencies split another 39 percent or $68.3 million;
• And the 535 cities and villages split the remaining 22 percent of the money, or $38.5 million.

These dollar allocations are then divided among the various road commissions and cities and villages by the use of other formulas in the legislation that include population and miles of roads. It should be noted that townships do not receive any dollars since they technically do not own roads. County road commissions own township roads.

So that is how it shakes out – that is how $175 million gets distributed among the 619 owners of the system. So how much does your county or city receive of this $175 million? You can go to the MDOT website and find out by going to the tab that identifies the new revenue package and then how much of the $175 million goes to each agency. For example, the City of Allen Park will be getting about $190,000 while Ann Arbor will receive $816,000. The City of Detroit will receive $5 million while Livingston County will receive $1.5 million, and Oakland County will have an additional $7 million to spend.

How far can each piece of the pie stretch?

More importantly, what can I, as a road owner, do with these dollars? How far will it go to actually fix identified problems? When you consider what resurfacing a mile of road can cost – a single mile of resurfacing can run about $1.5 million (depending on the many variables that attend every project ) – the dollars do not go as far as many people think. Even MDOT, which will receive $68 million, will only be able to fix a few more miles of road statewide! Depending on where you live, you may not see the difference.

What is my point in all of this? It is not to knock the improvements that $175 million can make. It is to have you begin to understand that the size of the problem has grown as a result of the issue not being addressed over many years.

Approving an additional $175 million will make some people feel like they have done their job when, in reality, the size of the problem is way beyond what an additional $175 million will buy. Some people will call their cities and road agencies and ask why roads have not been improved given all the new money that has been allocated. To see a real difference in the quality of our roads, we need to be talking about billions of additional dollars, rather than millions of additional dollars.

Sorry to be the bearer of this news, but if you really want to see your road system fixed, we need to be talking about a lot more investment. Unfortunately, the best time to do this would have been 20 years ago. It gets more expensive and daunting each year we wait. So the new best time to do this is now, or I guarantee you we will be having this same conversation next year and every year until we actually address this problem.