As we lurch toward the August primary elections, there is a lot of discussion among candidates about the poor condition of Michigan’s roads and how to raise money to repair them. While I strongly support additional road funding, I am concerned by the alleged solution some candidates propose: bonding.
It’s no secret our roads are in bad shape. In fact, to use a highly technical term, they suck. That is the legacy of our state’s lack of willingness to adequately fund the roads for decades. So, the question is, what do we do now to properly fund the repair of the roads?
The state Legislature enacted a new road-funding package in 2015. We truly appreciate that package and the effort it took to get it approved. But, as the Governor has said, it’s only a good start.
Nearly all candidates and politicians seem to agree that additional road funding is needed. They vary, though, on how to generate the funds.
Frankly, I don’t much care what the state Legislature does to generate more road funding as long as they do so – with two exceptions. I think it’s a bad idea to sell bonds to generate road funding, and funding should be dedicated solely to roads so it can’t be reallocated elsewhere in the future.
In the past, state road funding came predominantly from the gas tax and vehicle registration fees, which generated protected revenue – money that cannot be spent elsewhere. The latest funding package, however, relies for half its funding on dollars from the state General Fund, which could be reallocated any time the Legislature feels like it.
To ensure consistent, stable road funding, it must be guaranteed to be available in the future. That is critical for the future of Michigan’s roads.
Bonding is essentially taking out a loan to pay for the roads. The problem with loans, of course, is that you have to pay them back. So, if the state bonded for road funding, it would simply be creating future debt that would reduce the amount of road funding available in the future.
Ask the Michigan Department of Transportation (MDOT) what it’s like to have considerable debt. For a while, MDOT devoted nearly a quarter of its budget each year to repaying the debt accumulated through previous bonding programs. In fact, were it not for the state Legislature dedicating big chunks of the new road funding package for several years to pay MDOT’s debt, the agency would still be spending large sums each year to pay off past improvements, some of which are approaching the end of their useful life.
This is not a partisan issue. Both Republic and Democratic governors have introduced bonding programs to raise funding for roads in the past.
We at the Road Commission for Oakland County (RCOC) have strived to minimize our debt. As a result, we carry very little debt on our books. We believe that is the responsible way to run a public agency – any money spent on interest is money that is not being used to improve roads.
Sure, it’s much harder to find ways to fund roads other than borrowing – such as raising taxes, cutting spending elsewhere or reallocating funds. But roads are a critical element of our economy and our lives, and those are the hard decisions that we elect our politicians to make.
While we appreciate the heightened focus on road funding by our political candidates, I encourage them to identify funding sources that don’t involve borrowing and that are guaranteed to be available in the future. We want to improve our roads today, but we don't want to mortgage our future to do it.
Eric S. Wilson is chairman of the Oakland Country Road Commission.