Editor’s note: This is the second in an occasional series on transportation funding leading up to the May 5 special election. Read part one here.
In our first post in this series, we explored the factors—changing driving habits, fuel taxes not keeping pace with inflation, more fuel-efficient vehicles—that have left Michigan and other states hurting for dollars to maintain transportation infrastructure.
In this post we’ll dive into what Proposal 1 would do to begin addressing that shortfall. We’ll warn you right now, folks: This is gonna get pretty wonky. But we think it’s important that voters really understand what’s on the ballot in May, so we’ll do our best to be both thorough and readable.
First, we need to understand how we currently fund Michigan’s transportation system. And as you’ll see, for all the talk by its opponents of how “complicated” Proposal 1 is, it’s not as if our current system is the model of elegance.
How transportation funding works today
The bulk of our transportation dollars comes in roughly equal proportion from two main sources: First, there’s the motor fuel excise tax—19 cents per gallon on gasoline and 15 cents per gallon on diesel—that we all pay at the fuel pump. Second, there’s the vehicle registration fees we pay at the Secretary of State’s office. The motor fuel excise tax is a flat tax, meaning that it does not react to price inflation—we pay the same amount whether gas costs $1.50 or $3.50.
About half of our transportation funding comes from the federal government. In recent years our transportation shortfall has been so significant that we’ve had to tap Michigan’s general fund—basically the state’s main checking account—just to meet the match required to be eligible for those federal funds. That money all pours into the Michigan Transportation Fund, the bulk of which pays for roads and bridges. The transportation fund also supports public transit and directs money to the Recreation Improvement Fund, which supports trails, waterways and other outdoor amenities that make Michigan a great place to visit and explore. Read more