ESCANABA- Anyone who has been following the news lately is familiar with the financial straits Michigan is dealing with. The impact is being felt not only by local school districts and municipalities, but also county road commissions.
Michigan has the eighth largest public road system in the nation and ranks sixth largest for local road systems including city, county and village roads. Michigan is ranked third in the nation for the largest county road system and 28th overall for the largest state highway system.
"State highways fall under the jurisdiction of the Michigan Department of Transportation, while county road commissions have jurisdiction over the roads in their respective counties, including township roads," explained Rob VanEffen, managing director of the Delta County Road Commission.
An issue facing the Delta County Road Commission and other road commissions across the state is finding the funds to maintain, repair and reconstruct existing road infrastructure.
Currently, under Michigan law, 19 cents of every gallon of gas purchased in Michigan goes into the Michigan Transportation Fund (MTF) which is distributed to county road commissions.
Another source of funding for roads in Michigan comes from the vehicle registration fee.
"The state's gas tax was last raised to 19 cents back in 1997 when it was increased from 15 cents per gallon. Prior to 1997, the last time the gas tax increased was in 1984 when it went up from 13 to 15 cents per gallon," said VanEffen.
The MTF only collects 19 cents per gallon for roads, regardless of gas prices. When gas reached historic highs near $4 per gallon in 2008, the gas tax remained the same, noted VanEffen.
Based upon 2004-2005 collections, Michigan collected nearly $927 million which was divided between state, county and local entities.
When the state gas tax is broken down, six cents of the 19 cents gas tax, or $300 million, is used by MDOT for building and maintaining all interstate and state highways.
Another six cents of the gas tax, or $300 million, is spread out and divided between the 83 counties in Michigan, while three cents of the gas tax, or roughly $170 million, is split by 533 cities and villages to support local road projects.
Two cents of the gas tax, or approximately $100 million, is dedicated to public transit. The remaining one cent, close to $37 million, is used to finance road projects critical to economic development and also provides compensation to other state agencies supporting the transportation system.
"Of the 19 cents per gallon gas tax, approximately one-half of a cent or nearly $24 million is used to support local bridges, railroad crossings and recreational areas," said VanEffen.
Compared to other states, Michigan historically remains below average in the amount of gas tax collected per gallon, explained VanEffen.
Wisconsin currently collects 30 cents per gallon of gas. Illinois collects 19 cents per gallon but allows local gas taxes to be collected, increasing the gas-tax rate to above 19 cents.
Other states which have a higher-per-gallon gas tax than Michigan include: Ohio which imposes a 28-cent-per-gallon tax; Pennsylvania with 32.3 cents per gallon; and Minnesota with 20 cents per gallon.
Only Indiana imposes a lower-per-gallon gas tax than Michigan at 18 cents. However, Indiana had generated a substantial road fund by leasing its toll road to a private company.
"In November 2008, Governor Granholm appointed a Task Force to look into transportation funding," said VanEffen. "The task force was a non-partisan group made up of four state legislators, nine businesses, along with labor and community leaders."
According to VanEffen, the Transportation Funding Task Force studied roads in Michigan for six months. It concluded, in order for the state to maintain the existing road system in good condition, the state would need to double its level of annual road funding, resulting in an additional $3 billion per year on roads in the state.
"There is also the federal gas tax which is 18.4 cents per gallon, however federal road funds coming into the state are split between MDOT, county road commissions, cities and villages," said VanEffen.
Under the formula used by the state to allocate federal funds, 75 percent goes to MDOT with the remaining 25 percent divided between road commissions, cities and villages statewide.
This means the remaining 25 percent is divided between 83 counties road agencies, 533 cities and villages, noted VanEffen.
"Additionally, Michigan is a donor state when it comes to federal funds," said VanEffen. "For every dollar we send to Washington, Michigan receives 92 cents back. The remaining eight cents goes to the other 49 states."
He also added, currently there are five counties in the Upper Peninsula which have road millages with the funds being used specifically for road maintenance and repair within the county. It is not spent on state highways.