MCRCFunding d g

CrisisCrisisWhat You Don’t Know WILL Cost You

Michigan is Experiencing a Transportation Funding Crisis –and that affects Monroe Countyand that affects Monroe County

At the current funding levels, the condition of Michigan’s Transportation infrastructure

ill d liwill decline.

TELLING STATISTICSTELLING STATISTICS

One-third of our county roads are unpaved

N l th f th fNearly three-fourths of our paved county roads are deteriorating and in need of repair

Al t f t t fAlmost forty percent of county bridges and culverts are deficient

HOW DOES THIS AFFECT ME?

Time lost in traffic, wasted fuel, and crashes cost each Michigan driver $1,671 per year.

That’s $7 billion.Statewide

In order to understand the road issues in Michigan we need to first understand who isMichigan, we need to first understand who is responsible for the roads. In Michigan all roads fall into one of three categories of roadIn Michigan, all roads fall into one of three categories of road jurisdiction:

1. State highways, under the jurisdiction of the Michigan Dept. of1. State highways, under the jurisdiction of the Michigan Dept. of Transportation (MDOT): 9,695 miles (8 percent of all roads).

2. City or village streets, under the jurisdiction of Michigan’s 533 y g j gcities and villages: 20,914 miles (17 percent of all roads).

3. County roads, under the jurisdiction of county road commissions: 90,162 miles (75 percent of all roads). Note: Michigan has the eighth largest public road system in the nation, the sixth largest local (county city and village roads) system and the thirdsixth largest local (county, city and village roads) system and the third largest county system. Michigan's state highway system is the 28th largest in the nation.

WHERE DOES THE MONEY COME FROM?FROM?

1. State Transportation Funds – are primarily used for maintenance2. Federal Transportation Funds – are primarily used for rehabilitation and

improvement

Michigan’s primary sources of transportation funding are the state gas tax and vehicle registration fees.

improvement3. Local Taxes – are primarily used for rehabilitation and matching Federal Grants

- Michigan's gas tax is 19 cents per gallon. Michigan's gas tax has not been

gas tax and vehicle registration fees.

increased since 1997.

The Monroe County Road Commission [MCRC] i d $9 811 117 i 1998 d i Registration fees have

been declining due to motorists purchasing fewer new vehicles

received $9,811,117 in 1998 – and is scheduled to receive $8,964,734 in 2010.

The MCRC will be operating with less revenue fewer new vehiclesThe MCRC will be operating with less revenue than it did 12 years ago.

Myth Buster: Skyrocketing fuel prices don’t provide a windfall of road funding!•Fuel taxes are not based on the price per gallon•Fuel taxes are not based on the price per gallon, but rather the number of gallons consumed.

•As gas prices spike, drivers consume less and therefore generate less f el ta estherefore generate less fuel taxes.

•Improved gas mileage and alternative fuel on newer vehicles has also impacted fuel tax revenues.

Myth Buster: Paying high levels of property taxes has little to do with road maintenance funding.

•Road maintenance funding comes from vehicle registration fees and f el ta esand fuel taxes.

TOTAL $558 million

$1.5 billion$1.5 billion

BREAKING DOWN MICHIGAN’S 19¢ STATE GASOLINE TAX19¢ STATE GASOLINE TAX

Michigan’s 19 ¢ gasoline tax currently yields approximately $ $$927 million annually (each penny is worth approx. $48.8 million/year)All gas tax monies go to the MI Transportation Fund to be g g pdistributed as follows:

6¢ 6¢ 3½¢ 2¢ less than 1¢$300 million is $300 million is Roughly $170 Approximately Close to $37 million$300 million is used by MDOT to build & maintain all interstate, US and M-numbered hi h

$300 million isspread among83 county road commissions

Roughly $170 million is split by 533 cities and village to support local

d j t

Approximately$100 million is dedicated to public transit

Close to $37 million finances road projects critical to economic development & compensates other state

i hi h idhighways road projects agencies which provide support for the transportation system

AND½ of a cent { l $24 illi t l l b id il d½ of a cent { nearly $24 million supports local bridges, railroad crossings and recreational areas]

WHERE DO WE RANK?WHERE DO WE RANK?

Since the 1960s, Michigan has been in the b tt 10 t t bottom 10 states for state and local transportation transportation funding.

STATE ROAD FUNDINGNeighboring states have established considerably higher gas tax rates!

Indiana: 18¢ per gallonIndiana: 18¢ per gallon

Michigan: 19¢ per gallon Illinois: 19¢ per gallonIllinois: 19¢ per gallon

Minnesota: 20¢ per gallon

Ohio: 28¢ per gallonOhio: 28¢ per gallon

Wisconsin: 30¢ per gallon

Pennsylvania: 32.3¢ per gallony ¢ p g

While Indiana’s gas tax is lower than Michigan’s the state has generated substantial road funding by leasing its toll road to a private company.g y g p p y

Illinois also allows local gas taxes which increase its gas-tax rate to well above 19 cents in many counties.

MONROE COUNTY ROAD COMMISSION USES MTF FUNDS TO MAINTAIN:

RoadsRoadsBridgesBridgesCulvertsCu e ts

How we use MTF Revenue

Operating Expenditures:p g p•Pavement Maintenance •Roadside Maintenance M i & T i i

•Patching and Chip sealing•Signage & Pavement StrippingD i W k•Mowing & Trimming

•Snow & Ice Control•Drainage Work•Right-of-Way Management

Capital Expenditures:Fleet Eq ipmentFleet EquipmentInfrastructure System Preservation

MONROE COUNTY ROAD COMMISSIONMONROE COUNTY ROAD COMMISSION

MCRC maintains approximately 1,500 miles of roads

430 Primary Roads

910 Local Roads

220 State Trunkline (594 lane miles)

WHAT’S THE AVERAGE COST?WHAT S THE AVERAGE COST?

Replacing a bridge deck –p g g$350,000 per lane

WHAT’S THE AVERAGE COST?WHAT S THE AVERAGE COST?

Resurfacing asphalt –$200,000 (2 lanes for one mile)

WHAT’S THE AVERAGE COST?WHAT S THE AVERAGE COST?

Winter maintenance –Winter maintenance $3,000 per lane mile (plowing and salting)

OUR FUNDING DOESN'T GO AS FAR AS IT USED TO

State Gas Tax has dropped in

The 19 cent state gas

State Gas Tax has dropped in value 22.6%

tax is now only worth 14.7 cents.

Now

ROAD CONSTRUCTION COSTS KEEP GROWINGKEEP GROWING

Item Percentage increase, '98-'0812-yard snowplow/dump truck (purchase price) . . . . . . . . . . . 74%Diesel fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .489%Gasoline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420%Asphalt 49%Asphalt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49%Gravel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20%Guardrail & hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102%Pl bl d 34%Plow blades . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34%U-channel sign posts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145%Traffic signal cable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40%

OLDER ROADS AND BRIDGES REQUIRE MORE MAINTENANCE

Michigan roads and bridges are aging, and carry higher

l f t ffi volumes of traffic than all but eight other states.

WINTER WEATHER IS HARSH ON OUR ROADS

Roads in Michigan are exposed to severe weather and Roads in Michigan are exposed to severe weather and harsh freeze/thaw cycles.

TRAVEL IS AFFECTING FUNDINGTRAVEL IS AFFECTING FUNDING

As Americans drive less, they , ypurchase fewer gallons of fuel, g ,and thus fuel tax revenue declines.

GAS TAX REVENUE IS NO LONGER THE ANSWER

New fuel efficient vehicles and hybrids have New fuel efficient vehicles and hybrids have further cut gas tax revenue.

Michigan gas tax revenue has decreased $100 Michigan gas tax revenue has decreased $100 million in the past five years.

Level of Service At Risk

Limited funding means MCRC cannot adequately maintain the reliablethe reliable transportation system Monroe’s economyMonroe s economy needs or provide the level of service the public expects.

Further reductions in maintenance services:

Reduction of infrastructure system preservation projectsLoss of pragmatic and predictive maintenance programs

Impacts on Daily Operations:

Loss of pragmatic and predictive maintenance programsMowing reductionsChip seal & Paving Program reductions/eliminationSnow plowing reductionsSnow plowing reductionsElimination of drainage maintenance Compromise public safetyLag in completion time for work ordersg pAccelerated rate of infrastructure deteriorationAccelerated rate of vehicle/equipment deteriorationLag behind in new technologiesLess skilled workforceIncrease in backlog infrastructure repairs/replacementsIncrease in cost of infrastructure repair/replacementsIncrease in cost of ehicle and eq ipment repair/replacementsIncrease in cost of vehicle and equipment repair/replacementsInadequate succession planning

Response to Revenue Shortfall

Budgetary Balancing Actions are implemented to contain or reduce expenditures:to contain or reduce expenditures:

•Vacancy Eliminations and Hiring Freezey g•Travel, Training & Communication Devices Restrictions•Deferment of Equipment Replacement•Reduction of Contractual Services•Reduction of Contractual Services•Deferment of Facility Improvements•Reduction of Infrastructure System Preservations Projects•Across-the-board conservative budgeting

Saturday, December 12, 2009Lack of road money will cripple state

MDOT warns it will delay 243 road projects unless Michigan lawmakers increase funding

stateDetroit Free PressFor three years, the Michigan Department of Transportation has lawmakers increase funding

By Monica Scott The Grand Rapids Press

December 07 2009 10:05PM

warned that the state would lose a ton of federal loot if it could not put up its 20 percent local matching money December 07, 2009, 10:05PMmoney.

MDOT Warns Money Running Out for Michigan RoadsMichigan Roads

Updated: Monday, 07 Dec 2009, 7:11 PM EST

Published : Monday, 07 Dec 2009, 5:28 PM ESTPM EST

By The Associated Press

TRANSPORTATION FUNDING TASK FORCETRANSPORTATION FUNDING TASK FORCE

Transportation Funding Task Force (TF2) p g ( )created in response to Public Act 221 in Dec. 2007

Issued final report to Legislature, Governor and State Transportation Commission on and State Transportation Commission on Nov. 10, 2008

Report available online: www.michigan.gov/tf2g g /

TF2 CONCLUSIONSTF2 CONCLUSIONSOur investment in transportation must increase significantlyincrease significantlyRoad-user fees are stagnantTransportation revenues have fallen while material costs have risen sharplyMichigan is currently evolving from under-investing in transportation to disinvesting in g p gtransportationCurrent investment in transportation needs Current investment in transportation needs to double

SOME STATEWIDE REVENUE RECOMMENDATIONSSOME STATEWIDE REVENUE RECOMMENDATIONS

Immediate ActionsIncrease vehicle registration ratesIncrease vehicle registration ratesAdjust motor fuel tax

Local OptionsLocal Options• Encourage local investment with a broad spectrum of

local revenue options• Public-Private Partnerships toll-financed reconstruction• Public-Private Partnerships, toll-financed reconstruction,

expansion, new construction of freeways

Longer Term Optionsg p• Increase sales tax and dedicate increase to

transportation funding• Direct all or a portion of sales tax on fuels toDirect all or a portion of sales tax on fuels to

the Michigan Transportation Fund

MONROE COUNTY ROAD COMMISSION USES LOCAL TAX FUNDS TO MATCH STATE AND FEDERAL DOLLARS TO RECONSTRUCT AND IMPROVE ROADS

Township contributions

In light of the insufficient level of state-collected road funding, the partnerships between the road commission and townships has enabled the MCRC to complete projects that otherwise would not have been undertaken for years, if at all.

Local Contributions

8 000 000

4,000,000

6,000,000

8,000,000

‐

2,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

County  Township 

MONROE COUNTY ROAD COMMISSION USES FEDERAL FUNDS TO RECONSTRUCT AND IMPROVE ROADS

Most road agencies in Michigan rely on federal road funding, generated by the 18.4-cent federal gas tax, for major road improvements, such as road widening projects. While federal funds coming to Michigan

FUNDS TO RECONSTRUCT AND IMPROVE ROADS

have increased slightly in the last couple of years, the increase has been minimal for most road commissions.

That's because the federal road funds coming to Michigan are split among the Michigan Department of Transportation (MDOT), county g g p p ( ), yroad commissions and cities and villages. After deductions for special programs and "earmark" grants, legislation and tradition set the division as follows:

75% = MDOT75% = MDOT25% = Divided among county road commissions, cities and villages

statewideThat means by the time the 25 percent local portion of any increase in

f f 83federal road funding is spread among the 83 county road agencies and 533 cities and villages in Michigan, no single agency receives a very substantial amount. Additionally, Michigan is a “donor” when it comes to federal funds: We send more money to Washington

DC than we get back. For every dollar Michigan sends to Washington DC in road funding, we get back 92cents.

Federal/State GrantsReceived by MCRC

6,000,000

8,000,000

2 000 000

4,000,000

‐

2,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 20092000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Federal/State Grants

2010 Is the Last Year We Will Be Able to Fully Match Federal Funding.

INABILITY TO MATCH FEDERAL AIDMDOT HIGHWAY AND MAINTENANCE PROGRAMSTATE REVENUE SHORTFALL AND FEDERAL AID LOSTSTATE REVENUE SHORTFALL AND FEDERAL AID LOST

If Michigan Can't Match Federal Funding, the Federal Gas Tax Collected in Michigan Will Go

t th Oth St tto the Other States

* Resulting program amount with declining state revenues and inability to match federal aid.

Questions ?Questions ?

Th k Y f tt tiThank You for your attention

Please let s kno ho e can be ofPlease let us know how we can be of service to you in the future.

Monroe County Road CommissionMonroe County Road Commission840 South Telegraph Road

Monroe, MI 48161734 240 5102734-240-5102

www.mcrc-mi.org