From State Notes – Topics of Legislative Interest: “The Rising Costs of Road Repair”

Despite the passage of a road funding package in 2015,1 designed to add $1.2 billion in new revenue to the Transportation budget annually, the condition of Michigan’s trunkline and local road systems continues to decline. The cost associated with fixing any roadway depends upon the condition of that roadway; roads in poor condition are significantly more expensive to address than other roads. As more and more of Michigan’s roads deteriorate into poor condition, the cost for fixing Michigan’s roads will continue to rise sharply.

Michigan’s roads now require an additional $2 billion dollars annually to fix because there are 20% more roads in poor condition today than there were in 2015. This paper provides a background on the road funding legislation adopted in 2015, describes the quality of Michigan’s road system and the dynamics of maintenance and repair costs, and discusses several approaches that could be considered to direct more funding to Michigan’s road system.

Michigan’s system of State and local roads and bridges is composed of three parts, each its own line item in the annual Transportation budget: those under city or village jurisdiction, those under county or county road commission jurisdiction, and those under State jurisdiction (commonly referred to as the State trunkline). The State trunkline includes all limited access interstate roads as well as State and Federal highways. Throughout this document, references to Michigan’s roadways are meant to include roads and bridges under jurisdictions of all three categories mentioned above.

Although the road funding package of 2015 generated, and will continue to generate, substantial revenue for roads, the delay in adding that revenue and the amount generated has contributed to an increase in roadways rated in poor condition. Michigan’s trunkline and local roadways now need more funding than they did in 2015 to stop the deterioration in road quality. New estimates place the cost to fix Michigan’s roadways at over $2.0 billion per year, and other factors may continue to drive the cost upwards, such as a potential shortfall in labor and the State’s low unemployment rate.