MMLCapital Conference

MMLCapital Conference

Director Kirk T. Steudle, P.E.Michigan Department of Transportation

March 4, 2009

Tough Times For Transportation Funding

Declining gas tax revenues

Declining state revenues for aviation, highways and transit

Uncertain federal revenue

+ Increasing costs

= Uncertainty

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Michigan is Experiencing a Transportation Funding Crisis

At current funding levels, the condition of Michigan’s transportation infrastructure will decline.

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- Michigan's gas tax is 19 cents per gallon. Michigan's gas tax has not been increased since 1997.

- Registration fees have been declining due to motorists purchasing fewer new vehicles

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Where Does the Money Come From?

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

$1.7 Million

Replacing a bridge deck - $1.7 million

(5-lane deck)

$800,000

Resurfacing asphalt - $800,000 (2 lanes for one mile)

$3,000

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

Up TO

$500,000

Urban Transit Bus – $300,000 to $500,000

What’s the Average Cost?

27% of North American land-based trade goes through Michigan

37% of North American rail trade moves through Michigan

Detroit Metropolitan Wayne County Airport (DTW) is the 10th-busiest airport in North America and

the 20th-busiest airport in the world

Michigan’s Transportation System Is Important on a Global Scale

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Where Do We Rank?

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

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Our Funding Doesn't Go as Far as It Used To

Due to Inflation, the 19 cent state gas tax is now only worth 14.7 cents.

State Gas Tax has dropped in value 22.6%

ThenNow

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Gas Tax Revenue Is No Longer the Answer

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

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

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Road Construction Costs Keep Growing

Asphalt costs are up 32.4% from 2002 to 2006.

Concrete costs are up 21% from 2002 to 2006.

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Older Roads and Bridges Require More Maintenance

Michigan roads and bridges are aging, and carry higher volumes of traffic than all but eight other states.

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Winter Weather Is Harsh on Our Roads

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

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Positive Gains Made in Road Conditions Are at Risk

In 1996, only 64% of state highways were in good condition.

In 2007, Michigan’s goal of 90% of all state highways in good condition was achieved.

By 2014, these gains will be lost.

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How Does This Affect Me?

Time lost in traffic, wasted fuel, and crashes costs Michigan drivers $7 billion each year.

That’s $1,671 per driver.

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At the current funding level, Michigan will lose jobs.

The decline in buying power of MDOT's funding

from 2006 to 2010 would mean a loss of more than 12,000 jobs.

Jobs Would Be Lost in All Sectors of the Economy

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New Economic Recovery Package:Not the Cure

President Obama signed a one-time economic recovery package totaling $48 B for transportation

Package = roughly 1 year’s worth of typical federal monies

Monies would not support maintenance and other services

Recovery package funding does not solve long-term transportation funding problems

Not the Cure For Michigan’s Transportation Funding Ills

2009-2013 Transportation Revenues

MDOT Highway and Maintenance ProgramState Revenue Shortfall and Federal-Aid Lost

$629$700

$111 $124

$630

$418**$524**$477**

$1,265*

$576

$102

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2009 2010 2011 2012 2013Year

mill

ion

s

Program Total with Routine Maintenance Federal Aid LostState Revenue Shortfall Federal Stimulus

* 2009 Announced Highway and Maintenance Capital Program

** Resulting Program Amount (w ith declining state revenues and inability to match available federal aid)

$1,239

Questions?