Crain’s Detroit Business
By Lindsay Vanhulle
January 17, 2017
Gov. Rick Snyder called for major new state investment in maintaining sewers, water systems and other public works in his State of the State address, citing failures including the Flint water crisis and the Fraser sinkhole.
The call came during a speech that heartily touted numerous successes — declining unemployment, more private-sector job creation, large companies like Google and Amazon setting up shop in Detroit and its suburbs. Snyder also pushed a goal to boost the state’s population above 10 million by the 2020 census.
He said the first step toward improving the condition of Michigan’s roads, bridges and drinking water is to keep track of the state’s infrastructure systems and proposed creating a central database that can act as a clearinghouse to help state and local governments and utilities better plan for repairs.
The database, known as an asset management system, was among the recommendations put forth last month in a report by task force appointed by Snyder to identify Michigan’s infrastructure priorities. The group was created in response to the lead-poisoning crisis in Flint’s drinking water.
The crisis in Flint — and the real infrastructure challenges across the state that it raised — will remain a priority in the coming year. More recently, a sinkhole opened up in Fraser due to a leaking underground sewer line.
“We’re at risk in every corner of Michigan” for failed infrastructure, Snyder said during the speech, delivered to a joint session of the Legislature at the Capitol. “We know this is a huge challenge.”
He called the Flint emergency a “sad chapter in the history of our state,” pledging to continue working to end the lead emergency.
A year ago, Snyder used his State of the State address to apologize for the crisis in Flint and ask lawmakers for millions of dollars in state aid. He also said he would release two years’ worth of emails related to Flint, which was an unusual step considering the governor’s office is exempt from state open records laws.
A package of bills that would have opened up the governor’s office and the Legislature to the Michigan Freedom of Information Act failed to get out of the legislative term that ended in December. Democratic lawmakers continue to call for increased transparency as the Flint crisis heads into another year.
U.S. Rep. Dan Kildee, D-Flint, recently introduced a bill in Congress that would require states to strengthen their ethics and transparency laws to at least match what is required at the federal level or risk losing the ability to manage some federal programs. The bill would require annual financial disclosures from legislators, among other things.
Kildee, who is considering running for governor himself in 2018, told reporters in Lansing on Tuesday that he believes the sense of urgency that underscored Snyder’s speech last year has diminished.
“I would ask the governor to return to that moment where it felt as if this was his top priority, a year ago today,” Kildee said. “I’m asking him to step up and do what he promised: Fix it. Go to the Legislature, provide those additional resources so that Flint really does receive this form of justice — the kind of justice that comes in the form of having it made right by the people who did this to them.”
Congress in December approved $170 million for Flint. The state has allocated more than $234 million toward the water crisis, which was caused by a decision to switch drinking water sources while the city was under state oversight.
Kildee said he wants Snyder to take the lead on ensuring Flint has the necessary resources to replace lead pipes and improve the city’s water infrastructure and prepare for long-term economic and health problems for the city’s kids who have been exposed to lead.
Snyder’s 21st Century Infrastructure Commission found that Michigan would need to spend close to $4 billion more per year just to fix the infrastructure systems it has. Groups from the Michigan Infrastructure & Transportation Association to Business Leaders for Michigan have said more funding will be needed if the state plans to fix problems with transportation, water systems, energy transmission and communications networks.
A database that could track infrastructure assets would be a logical place to start, Snyder said. The commission found that the state lacks coordinated planning between Lansing, municipal governments and utilities. The problem with that, in practical terms, means a single road might be torn up twice — first, to fix the surface, and later, to repair an underground utility line.
A bill has been introduced in the House to create a statewide infrastructure council, which could manage the database and set a long-term strategy. That bill could prompt “a robust conversation about how best to do this,” said Kirk Steudle, director of the Michigan Department of Transportation. “Flint was a wake-up call. Fraser was a wake-up call. It’s time for us to think more broadly.”
Funding will be a challenge. A $1.2 billion road-funding package adopted in 2015 will result in increased general fund pressure in coming years as up to $600 million in revenue is diverted to roads. The first $150 million will be set aside starting in the 2019 fiscal year. And the Republican-controlled state Legislature is floating proposals to reduce the state’s income tax — with the goal of eliminating it — though it’s not clear what revenue would replace it.
House Democratic Leader Sam Singh, D-East Lansing, told reporters Democrats are willing to consider ways to reverse the state’s underinvestment in infrastructure, though “it can’t be a half-measure.” Singh said any attempt to address infrastructure will need to also involve municipal governments, which have struggled with cuts to state revenue sharing.
Sandy Baruah, president and CEO of the Detroit Regional Chamber, said the state will have to look at ways to pay for existing repairs and also infrastructure systems that will be needed in a decade or more. That could mean considering public-private partnerships and, possibly, long-term infrastructure bonds while interest rates remain low.
A focus on jobs
Much of Snyder’s address Tuesday focused on job creation and talent. He called for expanding a new residential vocational training program at more state prisons, creating new apprenticeship opportunities and funding a program that could help K-12 school districts purchase equipment for skilled trades training, similar to a program in 2015 for community colleges.
He advocated for more career counseling in high schools and expanding a job program that currently helps long-term unemployed residents in four cities.
And Snyder wants Michigan to continue to lead in the burgeoning mobility sector, including leveraging the state’s automotive prowess with the development of connected and driverless cars.
Among some of the state’s recent work: MDOT has installed sensors along freeways in Southeast Michigan that can communicate with technology inside vehicles, and the Michigan Economic Development Corp. plans to help connect the tech industry in Silicon Valley with automakers in Michigan.
Snyder also signed legislation that will allow autonomous vehicles to drive on public roads at any time, not only while being tested, which proponents say will expand their development in Michigan. The state is home to Mcity, a 32-acre test site at the University of Michigan, and the planned $80 million American Center for Mobility at Willow Run in Ypsilanti Township.
Steudle said the state is waiting to hear whether the American Center for Mobility could earn a federal designation as a driverless car proving ground. The project already has named its first corporate funding partner in AT&T, which will be the facility’s sole cell network provider through 2020.
“This is an area we can not afford to slow down in,” Snyder said. “We are the world’s leader today. We need to continue to be the world’s leader.”
Snyder said he plans to establish a work group to address municipal unfunded retiree liabilities, for both pensions and health care, that would include legislative leaders, local governments and public employee unions.
Republicans in the House dropped an effort at the end of the last legislative session to address the billions of dollars in unfunded retiree obligations, though they have said the issue remains a priority.
“It was great to hear the governor address unfunded liabilities tonight, as this is the most pressing issue facing our state,” said James Freed, city manager in Port Huron. “If left unaddressed, it will debilitate our ability to deliver core services in communities across the state.”
Yet Democratic legislators said the problem can’t be solved without also addressing municipal finance and revenue sharing.
Communities won’t be able to contribute more toward their liabilities if they are limited in how much revenue they can collect, Singh said.
“You have to deal with this in a comprehensive way,” he said.
View the original article here: http://www.crainsdetroit.com/article/20170117/NEWS/170119837/snyder-pushes-to-amp-up-investments-in-state-infrastructure?X-IgnoreUserAgent=1