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Michigan needs solution to get $475M in road funds, $84M needed by Oct. 1 to land federal match

Wednesday, August 25, 2010   (0 Comments)
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Months ago, state lawmakers agreed it is critical to find $84 million so the state won't lose a massive federal match to fix its crumbling roads. 


Today, Democrats and Republicans remain miles apart on a way to secure that $475 million in federal funding. And the road ahead seems bumpy as they face an Oct. 1 deadline to pass a new state budget. 


Failure is not an option, some lawmakers say. 


"It would be absolutely crazy to let that (federal money) go," said Rep. Joan Bauer, D-Lansing, a member of the House Appropriations Committee. "We need to come up with some kind of compromise with the Senate so we don't leave that money on the table." 


A few weeks ago, state transportation officials were so unsure of the funding that they removed dozens of scheduled roads projects from lists provided to metropolitan planning organizations statewide. The affected local projects next year are the resurfacing of M-43, between Williamston and M-52, and repairs to rest area facilities along U.S. 127 in Ingham County. 


Delays possible 

Bill Shreck, spokesman for the Michigan Department of Transportation, said the agency is hoping to restore the projects once the funding issue is resolved. Even a few weeks delay in getting the funding could postpone project start dates next year, he said. 


"We can't assume we have the funding until we have it," Shreck said. "This is the first time in our memory we haven't been able to match our federal aid." 


While the Democratic-controlled House and Republican-controlled Senate have passed state transportation budgets that allocate the $84 million in state money, it comes from very different sources. 


The Senate budget secured the money largely by shifting money from its highway maintenance account, which already has been significantly cut in recent years. The House budget allocated $84 million in additional money from the general fund. 


Money 'doesn't exist' 

The divide is partly ideological in nature. For more than a year, Senate Republicans have refused to consider new revenues and insisted on a pay-as-you-go approach. Now, they are scratching their heads over the House appropriation, noting the state has faced a general fund shortfall of hundreds of millions of dollars for the fiscal year beginning Oct. 1. 


"(The money) doesn't exist," said Matt Marsden, spokesman for Senate Majority Leader Mike Bishop, R-Rochester. "It's hard to allocate $84 million from the general fund when the general fund is $800 million short." 


Mike Nystrom, executive vice president of the Michigan Infrastructure and Transportation Association, said he is disappointed the Legislature hasn't made progress on increasing the state's gas tax to avoid such last-minute scrambles to find transportation money. 


In January, Bauer co-sponsored a bipartisan bill to phase in an 8-cent a gallon tax increase through 2013, eventually generating $350 million annually. 


Though pressure has been building for lawmakers to consider a gas tax, the bill has not moved out of the House Transportation Committee. 


In May, gas tax advocates cited a report by the Anderson Economic Group saying the state stood to lose 12,000 jobs without the $475 million in matching federal funds. 


The state's gas tax of 19 cents per gallon has not been increased since 1997. 


Meetings ahead 

"We have been talking about this for years, and this should be a priority," Nystrom said. "It's a basic government function. We continue to fall behind on our infrastructure investment." 


Within the next few weeks, House and Senate members will meet in conference committee to try to reconcile the differences between the two department budget bills. 


Bauer said she doesn't like the idea of taking the money largely from an underfunded highway maintenance budget. 


But Rep. Paul Opsommer, R-DeWitt, also a member of the House Transportation Committee, said he supports the Senate approach to the issue, saying it clearly identifies where the money will come from. 


Regardless, Opsommer said, he is confident a compromise will be negotiated before Oct. 1. 


"We will find it period," Opsommer said of the money. "That's how important it is." 


From the Lansing State Journal: 

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