5 Principles for Transportation Funding

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Following the defeat of Proposal 1, the Detroit Regional Chamber continues to be an unwavering supporter of transportation funding. As alternatives are debated, the Chamber urges the Legislature to adhere to the following principles when searching for a solution to Michigan’s transportation funding crisis:

1. Transportation infrastructure should be funded by users of the system.

Governor Snyder’s original proposal, Proposal 1, as well as plans passed by both the Senate and House maintained the proper role of transportation users in funding the system. Certainly, there can be policy disagreements on each of these proposals, but they met the basic benchmark that user fees are the best model to fund transportation. The Chamber welcomes creative solutions but creativity shouldn’t be the enemy of utility.

2. The funding crisis has been decades in the making, an appropriate solution should be permanent and dedicated.

There have been various reports and suggestions that existing state funding can be found within the state budget to properly fund our transportation system. While this is certainly true, funding transportation in this manner is at its essence, a one year solution, there is no guarantee that future Legislatures will prioritize spending in the same manner. Our infrastructure requires a multi-decade commitment to meet the expectations of job providers and citizens.

3. New revenue will be required to protect services that the business community and citizens demand.

The House passed plan in 2014, would have adversely impacted the ability of schools and local governments to provide necessary services. As such, the Chamber opposed the plan and will continue to oppose similar models that take away revenue streams from vital services. Certainly, efficiency in government can and should continue, including improved and expanded warranties on road construction projects and smarter bidding procedures. However, attempting to cut our way out of the problem diminishes quality of life, economic competitiveness and most importantly does not provide a guaranteed revenue source. We must not solve this problem by creating a new problem.

4. Transportation is multi-modal and all modes of transportation are important to competitiveness.

Businesses clearly rely on roads and bridges as a means to move products and attract customers. Fixing our roads is of primary importance. However, businesses also rely on other modes including rail, transit and Great Lakes shipping. A specific example of reform needed to continue multi-modal growth is SB’s 415 and 416 of 2013 which would make Michigan’s taxation of aviation fuel remain in compliance with federal regulations.

5. Speed is important, but getting it right is more important.

The Chamber is fearful that well intentioned efforts to solve this problem in a piecemeal approach will lead to public perception that the entire problem has been solved and thus making efforts to complete the work at a later date even more difficult. A permanent solution of $1.2 billion is the bare minimum, waiting beyond this summer makes the price go up considerably.

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