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Bulletins, News, and Press: MITA In the News

Newsmaker Friday: Nystrom - Road Funding Mix Needed

Monday, November 7, 2011   (0 Comments)
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Volume #50, Report #218

The $1.4 billion in new revenue needed for the state's road system should come from more than just vehicle registration fees, a leading advocate said Friday, urging the inclusion of additional revenue from overhauling the gasoline tax.

Mike Nystrom, executive vice president of the Michigan Infrastructure and Transportation Association, said Governor Rick Snyder has displayed tremendous leadership in making the case for substantially increasing road funding after years of the state letting its roads drift into bad shape. And his call for switching the gasoline tax from 19-cents per gallon (15 cents on diesel fuel) to a percentage of the price paid at the wholesale level would put Michigan out front nationally in modernizing its gasoline tax, Mr. Nystrom said.

But Mr. Snyder should not rule out having the overhaul of the gasoline tax yield more revenue, Mr. Nystrom said. Mr. Snyder has called for making the changes revenue-neutral, at least initially, something Mr. Nystrom called the one letdown of his proposals. And while Mr. Snyder has not formally proposed it, he has floated the idea of gaining the $1.4 billion in revenue through increases to vehicle registration fees.

"Let's mix it up," Mr. Nystrom said, suggesting a melding of the two proposals.

Mike Nystrom said a mix of new revenues for roads is needed.

Having the new gasoline tax bring in more revenue would allow a smaller increase in vehicle registration fees than the $120 average hike per vehicle Mr. Snyder has suggested. It also would ensure that visitors to Michigan contribute more to fixing roads instead of putting the whole burden on state residents, Mr. Nystrom said.

The $120 figure has spooked many legislators and already seems to be in trouble in the Legislature. The tactical advantage is it would mean one vote for legislators instead of two, but Mr. Nystrom said it is the way to go.

"It's going to be two tough votes," he said. "But let's do a little bit of a leveling here."

Supporters also will need to do a better job, Mr. Nystrom said, including himself in that group, of explaining the vehicle registration hike. It has been portrayed as a $120 per vehicle hike for everyone when in fact that is an average. Those with more expensive vehicles would pay more than the additional $120 while those with cheaper ones might actually pay less than they do now, he said.

"We as the advocates for increased funding need to do a better job of explaining what this means to help the governor," he said. "As with anything in the legislative process, it's a whole lot easier to explain a concept when language is actually laid out in a bill that has been introduced. Right now we're talking about concepts and proposals and that's a little more difficult for us to explain."

Mr. Snyder's special message on infrastructure, delivered October 26, was a heady moment for MITA. After years of waiting, finally they had a clear call for help on their priorities.

Mr. Nystrom said the group tried to be a resource for the Snyder administration as it assembled the proposals.

But the immediate legislative reaction has been concerning, Mr. Nystrom said.

"We were hopeful that there would have been more of an immediate reaction, similar to that of some of the governor's earlier messages," he said. "At this point, it seems as though the Legislature is willing to have the conversation as the governor suggested, but yet we're still looking for those individuals who are willing to introduce legislation and be sponsors for the ultimate solutions of coming up with $1.4 billion of additional investment."

Instead, lawmakers are bandying about various ideas, from Rep. David (R-Grandville) concept of dipping into the Natural Resources Trust Fund to Sen. Howard Walker's (R-Traverse City) proposals to raise the sales tax to fund roads while also eliminating the gas tax.

House Speaker Jase Bolger (R-Marshall) has urged greater spending discipline at the Department of Transportation before seeking new revenue.

But Mr. Nystrom said the various proposals in the Legislature only come up with $400 million to $600 million.

"We like the dialogue thus far with regard to some of the basic ideas, but even combined together, they don't add up to that $1.4 billion number yet," he said. "Reforms and efficiencies have to be considered first. We recognize that politically. But is that going to fill the gap that we have? Absolutely not."

Advocates plan a strong push to win approval of the changes, Mr. Nystrom said. Failure now, with Mr. Snyder as such a strong advocate, would be a huge setback.

"We have to take full advantage of finally having leadership on the issue," he said. "These revenue enhancements on transportation have never happened without gubernatorial leadership. Now that we finally have that, we need to all work very aggressively together as interested parties to help the governor move this forward through the Legislature."

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