$740M of Michigan roadwork axed

State forced to cancel 137 projects after it can't come up with its share of money

Tom Greenwood, Steve Pardo and Mark Hornbeck / The Detroit News

The state took another hard shot Thursday when the Michigan Department of Transportation announced it has canceled more than 137 road and bridge projects -- totaling $740 million -- due to Michigan's inability to match federal dollars. Michigan's portion of the federal match for road construction will now go to other states.

"We are in a state of crisis when it comes to our transportation funding, and it is being felt in every community across the state," said Mike Nystrom, vice president of government and public relations for the Michigan Infrastructure and Transportation Association, which represents 800 construction related companies within the state. The list of canceled projects, which includes 28 high-profile projects in Metro Detroit, was part of MDOT's five-year road and bridge program presented earlier this week to the House Transportation Committee. Nearly $247.8 million would have been spent on road projects in Metro Detroit.

"These projects are vital to Michigan's economic future," said Nystrom. "When roads are maintained, they attract new business. Economic and job growth will not happen in Michigan when MDOT is forced to cancel critical infrastructure projects."

Under the funding formula, the federal government pays for 80 percent of road projects and requires each state to come up with the remaining 20 percent. Michigan relies on fuel and registration taxes for its transportation funding, but those revenues have fallen steadily over the past several years because Michigan motorists are driving less and buying fewer new cars.

If Michigan can't come up with its 20 percent, it loses the 80 percent match from the federal government.

While Michigan is set to receive nearly $873 million in Economic Stimulus Funds from Washington D.C., the monies cannot be used as matching funds for highway projects.

MDOT Governmental Affairs Director Ron DeCook said the state is predicting a $102 million shortfall in tax revenues in 2011, which would mean losing $576 million in matching federal funds for these projects.

The state has been trying to save money by refinancing bonds and cutting back on road maintenance, including less frequent mowing of freeway medians and diminished snow plowing and salting, DeCook said.

'Sorry state of affairs'

Kevin Maillard, Livonia's department of public works director, says the roads taken off the list will only get worse. He regularly travels the stretch of I-96 from Middle Belt to Telegraph -- a stretch that was scheduled for reconstruction in 2013.

"The road does need to be reconstructed," Maillard said.

"I'm disappointed it's not being done. What it's going to mean in the future is the roads are going to continue to deteriorate at a much greater rate. And they're in bad shape now.

But, he says, he understands MDOT's predicament.

"If you don't have the money, you don't have the money," he said. "If MDOT's having these problems, I guarantee every county is having these problems. We're all in the same boat."

The problem is the continued drop in gas tax revenues and vehicle registration fees, DeCook said.

DeCook said costs have risen at the same time revenues have tanked.

"Asphalt costs have increased by 30 percent between 2002 and 2006 and concrete is up by 21 percent for the same time period, as is steel," he said.

Novi resident Scott Moore, 36, said the roads are horrible and they're getting worse.

"The fact that we're losing millions -- tens of millions -- in federal money because we can't pay a portion shows what a sorry state of affairs we're in," Moore said.

Plymouth Township resident Larry Bertus, 47, tried to look at the bright side when he found out the I-275 bridge repair near his home has been called off.

"At least we won't have to deal with construction now," Bertus said. "Provided the whole thing doesn't collapse, I guess it will be business as usual."

But the entire situation is frustrating for Howell resident Matt Campanella.

"It's an extremely vicious circle," said Campanella, who drives 35,000 miles a year as the representative of a company that sells recreation equipment.

"They want less people on the roads so we have less greenhouse gases and to diminish reliance on foreign oil. Yet they want you to drive more to keep the tax revenues up. You can't have it both ways."

Campanella doesn't want to see a tax increase, but said it's inevitable.

"I don't want to see it, but who's going to come to a state with terrible roads? What will it be like in five or 10 years; that's scary," he said.

Gas tax increase discussed

In 2007 a transportation funding task force was formed to find ways to raise more money for Michigan's transportation needs, issuing its final report to Granholm in November 2008.

"The governor has been clear on this issue. Our roads are in terrible shape and we need to find another way to fund them. We don't want to postpone projects or not take advantage of federal dollars that are available," said Liz Boyd, Granholm's spokeswoman.

Among its many recommendations -- to be phased in over a five-year period -- were to convert the current gas tax of 19 cents per gallon into a percentage tax based on the wholesale cost of gas plus a raise in car and truck registration fees.

At the end of the five-year period, the state could raise an additional $1.8 billion in new transportation funds annually.

But getting the recommendations approved and passed could be a tough sell in Lansing.

"The inability of the state to assign matching funds is because the state can't spend money it doesn't have. It's not due to an unwillingness to fix infrastructure," said Matt Marsden, spokesman for Senate Majority Leader Mike Bishop, R-Rochester.

"We have a limited amount of resources and we're doing the best we can. And citizens have been clear about not paying higher taxes (for increased road funding) in this economy."

State Rep. Tim Moore even went so far as to send a letter to MDOT Director Kirk Steudle admonishing him for stating that "Michigan drivers can afford gas tax increases" in his June 2 appearance before the joint House and Senate Transportation Committee.

"People across Michigan are hurting from lost jobs, lower property values and enough other rising costs as all aspects of our economy are trying to survive on less," said Moore, R-Farwell.

"Michigan drivers cannot afford a gas tax increase right now, and it's ridiculous to say that. People in my area aren't buying $4 coffee drinks, they need that money and whatever else they can scrape together to put whole meals on the table. ...

"I agree that Michigan roads are in rough shape and understand that Director Steudle has a difficult task to meet the needs of our transportation system with a limited amount of resources. But so does everyone else who is struggling for the answers in these tough economic times."

tgreenwood@detnews.com (313) 222-2023