I live in Michigan, and the road conditions here are an absolute mess. Only one-third of roads are in good shape.
A 2013 review showed a full one-third of roads rated in poor condition, which means that they need to be replaced. They’re beyond where patching or resurfacing can do any good. Roads in poor shape need to be rebuilt from the ground up. On top of that, the remaining one-third are in fair condition, meaning that they’ll be in poor shape pretty soon.
Keep in mind that this study was done prior to two winters, the 2013-14 version which was the snowiest and coldest in modern history, meaning that the deterioration has likely accelerated since this study was done.
It’s bad and it’s only getting worse.
Current Lawmakers Hold Blame…But How Much
Roads are a mess because there is simply not enough money to fix the roads, both at the federal and state levels. I’ll get to that in a minute.
I know Michigan is not alone in bad road conditions, but since we’re among the worst, and because I live here, I’ll focus on that. The numbers I’ve heard is that Michigan needs around $2.2 billion dollars per year to bring the current roads up to shape, and then keep them in good shape. Between state funding and federal funding, they’re spending around half that amount, with just around $1 billion being spent on the roads last year.
That means that less than half the needed repairs are being performed, and the problem is compounded with these two kickers:
- Lower funding means that many repairs are funded so that they are essentially useless. Instead of laying a new 5-inch topcoat on a road, they’ll put down 2-inches, which means that the ‘fix’ costs less, but only lasts a fraction of the time as a full repair.
- Many problems are simply ignored, which makes them more costly down the road. Ideally, a road that slips from good to fair condition is repaired, bringing it back up to good condition. Since we don’t have the funding, fair roads aren’t touched, and instead they deteriorate that much faster to poor condition.
Sounds pretty grim, huh?
I tell you, it is.
Our lawmakers here in the state have been ‘trying’ (and I use that term very loosely) to address the problem. They haven’t been able to. Two separate attempts were made last year that would have fixed the issue, but the State House and State Senate could not agree on a proposal either time. The Senate was all set to vote a plan that would have raised fuel taxes and other related fees and make it good to go. The House said no go. See, here in Michigan we have a good portion of the actual land area belonging to the Upper Peninsula and other rural areas where they don’t have too many roads, and the conditions aren’t as bad or as important. So, what happens? Their representatives vote no. They see it as their citizens would be paying increased taxes to support the improvement of the roads outside of the area, so each proposal gets voted down.
And nothing gets done. Except the roads continue to get worse.
The current proposal that they ‘agreed on’ is to do nothing, and let the voters decide on a 1-cent per dollar increase in the state sales tax, which would raise almost another billion dollars for the roads. Sounds pretty good from a funding standpoint, but it’s getting little support. Voters don’t want the buck passed to them, they want the people whose job it is to do the work. My personal issue is that the increased tax would only affect residents, but not businesses. We have a lot of businesses that use the roads and create wear and tear, so it seems very unfair that they would not contribute to the increased funding. At least with a fuel tax, they would have.
So, that seems to be going nowhere.
On top of it all, the Feds aren’t kicking that much money in these days.
Road Problems Could Have Largely Been Avoided
I don’t know how roads are in your neck of the woods, but if they’re bad, you can blame politicians that are likely retired, or even dead.
From a Michigan perspective, here are the last time that the funding sources were raised that gives us our road repair money:
- State tax – 1997
- Federal tax – 1993
Yep, it’s been at least 18 years since the funding sources have increased that fund our roads.
Now, I remember when the state raised the taxes in 1997. It increased total funding to….about $1 billion dollars. The same as we have available today.
That was all fine and dandy back in 1997, but that doesn’t work anymore. Everything costs more money today than it did in 1997, including everything to do with building roads. Workers get paid more, materials cost more…well, you get the picture.
Essentially, we’re pretty much back where we started from when the gas tax was raised…18 years ago.
And, on the Federal level, it’s even worse. It’s been twenty two years.
Bad News To Worse
Here’s the real kick in the pants. On both the state and federal level, we’re not just failing to collect more tax to match the increases in costs, we’re actually collecting less! Not only have costs gotten higher in the 18 or 22 years since these amounts were put forward, but fuel economy has gotten better. So, we’re actually using less gas overall than we did back in the 1990’s. That’s great in many senses, but unfortunately, the roads still need attention and repair.
Three Simple Words Could Have Fixed This
The roads are a mess. The system is a mess. And, to think it all could have been avoided on both the state and federal level had three words been inserted in to the underlying legislation:
indexed to inflation
That’s all we needed to do. It was that simple. Had the taxes that were put in place in the 1990’s been indexed to inflation, guess what would have happened? They would have risen slowly, over time, to effectively match the rising costs associated with the roads.
Would it have been perfect? No. There likely would have been a gap because of the fuel economy issue, but it would be a heck of a lot smaller gap than we have today, and the paradox is that fixing a smaller gap would have probably been easier.
Now that the gap has grown and grown and grown, the ability and willingness to fix it becomes a bigger issue.
Imagine, if you will, that both of the taxes, state and federal, had been indexed to inflation. I’m just throwing out guesses, but let’s say that would have led to $1.8 billion being spent on roads, meaning that we have a $400 million gap.
Right now, asking voters for $1.2 billion is political suicide and so it turns to an automatic no for many voters. If that were cut down to one-third of the ask, don’t you think that makes it a little bit more likely that something could be considered?
Instead, we’re in this political game of chicken.
Nobody Likes Taxes
Now, I lean more Republican than Democrat, and I know that nobody likes paying more taxes and I know that many people think that gas is/was too high in price as it is, and many would scream at a big 20 cent jump (again, just playing with numbers). I get that and I agree with that, but if 1 penny a year had been added on over the last 18-22 years, do you think we’d even notice today?
See, I’m actually fine with an increase, because if we were all fine with it back in the 1990’s, I just look at it that we’re paying for inflation and that we probably should have been paying this all along. And, we would have had the lawmakers at the time been smart enough to add that wording.
I don’t know where the funding fights will land. I know it’s now a big issue on the Federal level, and here in Michigan I see this dragging on for a long time, while our roads continue to fail. I just hope that if it does ever get fixed that they figure out to add those three words, indexed to inflation. If they do, it will save a lot of people a lot of heartache 15-20 years down the road.
A road that, if done right, may actually be in good shape. We can only dream, right?
Readers, what are the road conditions in your area? Is your state suffering from a funding shortage? What do you think about indexing taxes like this to inflation?Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.