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Poll after poll show Michigan’s roads are a pressing concern to voters, and economic data show they’re vital to the state’s economy too. Consider: The state’s roads help transport about $860 billion worth of freight each year. For these reasons, assessing the condition, funding the maintenance and ensuring the longevity of Michigan’s roads is of critical importance.

The current condition of Michigan’s roads may not be as bad as what you’ve heard. For instance, 75 percent of the state’s trunkline roads — those that start with an “I,” “U.S.,” or “M” — are rated as being in fair or good condition. These roads carry over half of all passenger vehicle traffic and nearly 75 percent of commercial traffic. The concern with these roads is that their condition may soon worsen. The Michigan Department of Transportation estimates that by 2024, only one-third of these roads will be in fair or better condition.

Of more immediate concern are the roads maintained by county road commissions and local municipalities. Approximately half of these roads are rated as being in poor condition, according to the Michigan Transportation Asset Management Council. And these conditions are expected to worsen over time too.

In a new study published by the Mackinac Center for Public Policy, I estimate that $3 billion per year might be needed to bring the condition of all of Michigan’s roads up to fair or better condition. When practicable, Michigan should follow the “user fee” model for financing roads. User fees are similar to prices charged for goods and services in a private market. They aim to have the user of a public good pay the full cost of using that good. This is not only economically efficient, it’s also the most fair.

With this in mind, a major problem with Michigan’s current funding mechanism for roads is that commercial trucks pay significantly less in taxes and fees than the price of the damage they inflict on roads. For instance, an 80,000-pound, five-axle truck is estimated to cause $0.60 per mile in pavement damage, yet only pays about $0.11 per mile in diesel taxes. Plus, Michigan heavily discounts the registration fee for some commercial vehicles. If certain drivers are going to need to pay more to fund Michigan’s future road needs, owners of these commercial trucks and vehicles are the place to start.

There are other reforms that would help. The Michigan Comprehensive Transportation Fund currently diverts about $250 million per year away from roads for local public transportation systems, which often have low ridership rates. These dollars would be better used to improve roads statewide, rather than subsidizing local transit. The Transportation Economic Development fund diverts about $40 million per year toward projects that supposedly promote economic development. This money too would be better spent improving roads statewide, rather than dedicated to funding projects for a few lucky firms. The state also pays $61.5 million per year to cities for roads they are not responsible for maintaining, money that would be more appropriately used for trunkline maintenance.

Long term, the state should consider moving away from fuel taxes and pilot a vehicle-miles-traveled tax, as Oregon is doing. Drivers pay a fee per mile driven, tracked by a GPS unit in their car. This is a robust user fee, since what a driver pays is directly linked to how much they drive.

The condition of Michigan’s roads are not as bad as commonly thought, but could be better. There certainly are challenges to keeping the roads in acceptable condition, but Michigan can meet these challenges with some forward thinking. 

Chris Douglas chairs the economics department at the University of Michigan-Flint and a member of the Mackinac Center’s Board of Scholars.

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