Michigan’s crumbling infrastructure and the funding surrounding it has been a hotly debated topic for decades, and the results of a two-year study explore one possible funding solution — tolling.
The “Michigan Statewide Tolling Study,” which was released to the public Dec. 21, 2022, was prompted by Public Act 140 of 2020 and PA73 of 2022, which required the Michigan Department of Transportation to charter an outside consulting firm to conduct a feasibility analysis and provide a strategic implementation plan.
“While we’ve done a record amount of road repair in the past few years, a lot of needs remain,” MDOT North Region Communications Specialist James Lake said. “This study is a good opportunity to continue the discussion of new ways to fund this needed work.”
According to the report, Michigan joins at least four other states to examine the feasibility of tolling to help provide funding to address aging roadways and bridges.
Several funding sources for road repairs that Michigan relies on are considered short-term and some are forecasted to diminish over time, such as fuel taxes, which will decline as cleaner energies and higher fuel efficiencies are adopted. To compound the issues, according to the report, the percentage of Michigan’s trunkline pavement that was considered in good or fair condition in 2021 was 75%, and that is expected to decline to 50% by 2028.
According to the study, other factors contribute to more uncertainties, such as the continued inflation of construction costs.
What roads were studied?
The study looked into tolling some of Michigan’s most traveled roadways, including all or portions of I-69, I-75, I-94, I-96, US-23, US-31, US-127, US-131, and several state highways. In total, nearly 2,000 miles of interstates, US routes and Michigan routes were studied as potential toll road options.
A total of 31 limited-access highways were evaluated in the first phase of the study. Then in each phase, different criteria were applied, effectively screening out certain roadways that didn’t meet various parameters.
The criteria in phase one included things like minimum length and road conditions, while phase two included things like gross and net revenue, operational and safety issues, geographic equity and more.
After applying the criteria in phase one, 31 roads were reduced to 14 and at the end of phase two, the list of 14 roads was broken down into three tiers of implementation.
Phase 2 Screening Results
- Tier 1, 545 miles of roadways, ready for deployment around 5 to 7 years, includes parts or all of I-69, I-75, I-94, I-196, I-275, I-696 and M-14
- Tier 2, 232 miles of roadways, ready for deployment around 7 to 14 years, includes parts of I-75, I-94, I-96, US-23
- Tier 3, 379 miles of roadways, ready for deployment in 15 years or more, includes parts or all of I-69, I-75, I-96, US-23, US-131, M-6, M-14, M-59
How much are the proposed tolls?
The study evaluated three rates for passenger cars — 4 cents per mile, 6 cents per mile, and 8 cents per mile — and from that basis, multipliers were evaluated for larger or commercial vehicles at rates of 1.5 times and 4 times higher.
“Considering all toll roads nationally, these rates are similar to existing long-distance midwestern toll roads,” the study reads. “Toll rates were assumed to increase annually at the rate of inflation.”
Despite the higher rates for commercial vehicles, all of the proposed routes in the state would generate the majority of the revenue from passenger cars. According to the study, I-69 would be the highest commercial revenue producer, with nearly half of the revenue generated coming from commercial vehicles.
Another aspect of the study evaluated how much revenue would be generated by out-of-state cars versus in-state vehicles. More than half of the proposed routes would generate less than 5% of their revenue from out-of-state travelers and nine of the routes would generate from 5% to less than 20% from out-of-state passenger vehicles, with I-69 generating at approximately 19%, followed by I-94, I-196 and US-23 at approximately 13% each.
How much revenue could toll roads produce?
The study estimated Michigan could generate between $1.5 billion and $2.8 billion in annual gross toll revenue if the entire limited access highway system were tolled. This estimate varies based on the per-mile scenario that is used.
According to the study, I-94 could generate more than $600 million annually if drivers were charged 8 cents per mile. The highest revenue producer would be I-75, which is estimated to generate slightly less than $500 million at the same rate.
The revenue projections were reduced by 5% to include a number of discount programs to mitigate the impact on drivers. The types of programs discussed in the study included frequency, equity, geographic, rebate and high occupancy vehicle discounts.
During the second phase of the screening process, it was determined 6 cents per mile was the most feasible toll rate for analysis. Based on that figure, after removing discount program costs and operating and maintenance costs, the 1,200-mile toll system could generate $1 billion in net revenue annually.
How would it work?
According to the study, gone are the days of manned toll booths. Instead, after an estimated $10.1 billion in capital costs, Michigan could adopt electronic tolling, with overhead gantries with sensors and cameras that connect to a centralized computer system to assess tolls.
“This reduces the physical space needed for a tolling system and eliminates congestion, vehicle emissions and additional time associated with toll booth-based toll collection,” the study reads.
The cost of rollout would, of course, be staggered across the three tiers, with tier one costing an estimated $4.5 billion to implement.
What are the next steps?
The study was just an analysis of the possibility. Michigan has a long history of considering toll roads to fund road repairs. Before tolling could be enacted a number of things would need to be done, including receiving approval through the state legislature, and establishing things such as policies, statutes and administrative rules.
“A new statewide tolling program could generate significant transportation revenue – enough to sustain the life-cycle costs of the tolled roadways – but would be complicated and would require a careful approach to implementation,” the study’s introduction reads. “It would involve a wide range of technical, social, environmental, financial and regulatory steps.”
This article originally appeared in the Midland Daily News. For more, click here.