How Road Repairs are Funded
The first mile of concrete paved in the nation was along Woodward Avenue here in Wayne County in 1909. Many advances in road construction followed, but we are still struggling to create a mechanism to generate enough revenue to maintain the vast network of streets that have been built since. The surface conditions of most public roads are evaluated and given a “Pavement Surface Evaluation Rating” (PASER), which determines their priority in receiving Federal, State and County funds for repairs. The rating ranges from 1 to 10. Roads evaluated below 5 are in poor condition; and, unfortunately, more than half of the roads in Wayne County have a poor PASER rating.
State funds to build and maintain roads are governed under Public Act 51 of 1951. Road funds are generated at the Federal level through a fuel tax (Gas: 18.4 cents/gallon; Diesel: .24 cents/gallon.) This funding is managed by the Federal Highway Administration’s Highway Trust Fund. These funds are redistributed to the states to be used on designated federal aid roads. A diesel international fuel tax agreement distributes these federal funds back to states according to the miles a truck logs in. The State of Michigan uses 75% of federal road aid for State Roads and 25% for local (county, city and village) roads. In Wayne County, local roads eligible for Federal aid receive about 80% towards construction project costs, the County provides 10%, and the local city government provides the remaining 10%. The State also taxes fuel with an additional 6% sales tax, but the sales tax goes to schools and not to roads.
The State of Michigan also generates road funds through vehicular registration fees, an annual charge for electric and hybrid vehicles and a special supplemental appropriation for road repairs from the general fund. The State redistributes the fuel tax and vehicle registration fees to the County road agencies (39%) and to the local municipalities (22%). Since some of the gas taxes are generated by recreational vehicles and boats, a percentage of the state revenue is allocated to recreational improvements, boating facilities and off-road trail development. Also, many local communities have passed bond issues and special tax assessments to pay for specific road improvements under their jurisdiction.
One of the challenges in funding for road repairs and upkeep is that fuel efficiency standards on automobiles have decreased fuel consumption and – as a result – road taxes. Also, the current COVID pandemic has reduced the level of driving and will have a significant negative impact on the amount of gas taxes collected. Increases in fuel taxes has been negligible, and the cost of road repairs has far outpaced the increase of road funding. Needed road and bridge repairs have been deferred for decades, and we now find that much of the existing infrastructure is in poor condition. A long-term strategy and financing structure is needed to address the upkeep of infrastructure. Some of the items to consider are: an increase in the gas tax; a change in revenue from a fuel tax to a vehicle miles traveled (VMT) tax; and a change of maintenance practices, administration of roads and ways to improve local funding.
By Nancy Darga
Candidate for Wayne County Commission, District 9
Former Mayor Pro-Tem, Northville City Council 2007-2019
Treasurer, Northville Art House
Former Managing Director, MotorCities National Heritage Area 2008-2013
Former Executive Director, Ford Piquette Plant National Historic Landmark 2013-2019
Chief of Design, Wayne County Parks 1978-2003