Road Work: Michigan Chambers Help with Transportation Funding
After a long and hard fight in the legislature and at the ballot box, Michigan finally has a long-term plan for road funding.
Transportation funding has been a top priority for several years, but the final solution wasn’t found until after voters in May struck down a measure that would have increased the state sales tax by 1% to help raise $1.2 billion for transportation. In the worst defeat for a Michigan ballot measure in 52 years, 80% of voters said no. While it was clear that this particular plan was not what voters wanted, the public and the business community were still clamoring for a solution to solve a looming transportation crisis.
According to a study released in the spring, 38% of Michigan’s major roads are in poor condition, 45% are fair, and only 17% are good. Under current funding, the Michigan Transportation Asset Management Council estimates that 53% of those major roads will be in poor condition by 2025. With the “Pure Michigan” campaign spending money to draw travelers to Michigan, and countless other industries relying on surface transportation, it was clear that funding infrastructure improvements was overdue.
Transportation has long been a major priority for the Grand Rapids Area Chamber of Commerce. A 2015 member survey found that transportation was a top concern, with 64% saying that poor road conditions had an impact on their business. So, when a balanced package was being considered in the legislature to raise the $1.2 billion with a combination of new revenue and existing state dollars, the chamber moved to support the measure.
Grand Rapids joined five other regional chambers in support of a common sense, long-term funding solution calling for $600 million in dedicated funding from existing state revenues, and $600 million in new money. The other five chambers were The Chamber of Commerce – Grand Haven, Spring Lake, Ferrysburg, the Michigan West Coast Chamber of Commerce, the Muskegon Lakeshore Chamber of Commerce, the Lansing Regional Chamber of Commerce, and the Traverse City Area Chamber of Commerce.
According to Josh Lunger, director of Government Affairs in Grand Rapids, “the unified show of support was helpful in advancing the plan.” On Nov. 4, the Michigan Legislature passed the compromise package which was signed a week later by Gov. Rick Snyder. The $600 million in new revenue will come from $400 million from increasing the gas tax 7.3 cents per gallon and creating diesel parity, and $200 million from a 20% increase in registration fees.
The revenue increases take effect in January 2017. Moving forward, Lunger stressed the importance of working hand in hand with legislators to effectively plan for future budget pressures and the shift of $600 million in “existing state dollars". He urges deliberate and thoughtful consideration to determine where best to make changes so that important programs, such as Early Childhood Education and Workforce Development, are not compromised.
Infrastructure Part 3: Durham
Guest Post - John White, Director of Public Policy, Greater Durham Chamber of Commerce
Earlier this year, I was asked to take part in a webinar to discuss our involvement and the passage of a ½ cent sales tax for transit. While awaiting my turn to present on the issue, I listened to others familiar with the topic as they advised on how to best prepare for a ballot issue campaign. One person recommended having no less than $100K to fund campaign efforts, while another referenced needing at least a year to prepare, plan and educate the public on your issue. As I listened to these two individuals talk, I thought to myself this ought to be interesting….
In 2008, the North Carolina General Assembly passed enabling legislation allowing 94 counties the opportunity to charge & use a ¼ cent sales tax. The legislation also provided Durham, Orange and Wake County’s, also known as the Triangle, the opportunity to charge & use a ½ cent sales tax, for transit enhancements, with voter approval. Since 2009, the Durham Chamber and surrounding chambers have been at the table discussing this issue with the NC Dept. of Transportation as well as our elected officials at the state and local level. Unlike the other chambers, the Durham Chamber of Commerce is the only Chamber in the Triangle that has a dedicated committee to the topic of Transportation. In the summer of 2011, the Durham Board of County Commissioners decided to put this issue on the November 2011 ballot for voters to decide on. Given the Chambers role and attention to transit issues, the Durham Chamber stepped up and took the lead in organizing a campaign committee. I staffed the Durham Transit Campaign Committee and organized efforts of which led to the passage of the transit referendum. Having received 60.1% support for this ballot measure, to date, Durham is the only county that has successfully passed the ½ cent sales tax for transit within the Triangle region and the second in the State of N.C. (Mecklenburg County, 2007).
At last it was my turn to speak to Durham’s success during the webinar. After providing an abbreviated timeline of events, I informed the audience that the Durham Transit Campaign Committee, led by the Durham Chamber of Commerce, had roughly four months to organize. We did not raise over $50K.
Every community is different and while we can use lessons learned in other areas, it doesn’t mean that information is translatable to every community. Chambers are institutions that by design are forced to know business interest, community interest as well as who the players are within our respective communities. I’m glad to say that the Durham Chamber of Commerce understands how important this is and has been able to benefit from extending ourselves outside of the traditional box of business. Why should this example matter to business community? Since our success with this campaign, our creditability as an organization has risen along with the communities desire to work with the business community. Sure, people still come to us to sponsor most of everything. Nonetheless, we take this as part of the territory, knowing that in the end we’ve made more people aware of what we are capable of doing and the continual impact and reach chambers of commerce have!
Infrastructure Part 1: Louisville
Federal dollars are still flowing to states for infrastructure projects, but there’s not enough money to keep up with needed infrastructure expansion. Knowing the impact that transportation has on attracting new business to communities, chambers are seeking infrastructure project funding through alternate strategies such as new taxes, partnering with neighboring states or working with public and private partnerships.
Infrastructure is critical to economic competitiveness says Business Council of Fairfield County President, Chris Bruhl. As economic development becomes more ingrained in the chamber’s mission, chambers must step in to help solve regional infrastructure problems. Some chambers have tackled this challenge in unusual yet instructive ways.
Louisville, Ky.: Two Bridges and Two States
Louisville is a major transportation hub, with three interstates—I64, I-65 and the terminus of I71—converging downtown near the Ohio River. Logistics, distribution and manufacturing are key economic development sectors for the region, and each depends on safe and reliable bridges and a connecting highway network. But Louisville is currently served by only three Ohio River bridges that are near or over capacity, creating congestion and safety issues.
In 2003, after more than 450 public meetings and a five-year study, the federal government recommended two new bridges and reconstruction of a major interchange known as Spaghetti Junction to address the region’s current and future cross-river transportation needs.
Almost immediately, the project stalled because costs had ballooned to $4.1 billion. Nearly nine years later, a scaled back project that includes all the original major elements is on a fast track to construction. The recent progress is largely the result of strong support, perseverance and creative direction from business, community and political leaders.
Under the 2003 Bridges Project plan, Kentucky was to pay 70 percent of the cost and Indiana was to cover the rest. Relying on traditional highway funding generated from gas taxes, Kentucky’s Transportation Cabinet estimated 20 years for project completion, but long before that the project would absorb more than half of the state’s available road transportation funds—a politically unpopular option.
By 2007, with no definitive construction plan, business leaders stepped in, forming the Bridges Coalition, a bi-state advocacy group. Led by Greater Louisville Inc. (the metro chamber of commerce) and One Southern Indiana (Southern Indiana’s chamber of commerce), the coalition united business, labor and bi-partisan government leaders from both sides of the river. Nearly $2 million was raised to support the coalition’s work. Employing communications and legislative strategies, the coalition touted the project’s benefits of reduced congestion, improved safety and job creation, both during construction and after completion.
After three years of coalition work, a milestone was reached with passage of Kentucky legislation that allowed the use of tolls as a potential funding source for the project and the creation of a bi-state Bridges Authority to develop a project financing plan.
In 2011, Kentucky Gov. Steve Beshear, Indiana Gov. Mitch Daniels and Louisville Mayor Greg Fischer—all strong project supporters—agreed to a revised project design and accelerated construction timetable that reduced the $4.1 billion price tag to $2.6 billion. The governors also agreed to split the cost of the project more evenly. Kentucky would be responsible for the new downtown bridge and approaches including Spaghetti Junction, and Indiana would oversee construction of the East End span and approaches. This modification allowed each state to pursue its preferred financing method for its part of the construction.
Earlier this year, the two states approved the project’s finance plan. Electronic high-speed tolls on the two new bridges and the existing I-65 span will cover about half the cost of the project. (Federal law currently prohibits tolling on existing interstates. Kentucky and Indiana have applied for a waiver to allow tolling on the existing I-65 bridge as part of the project.) The remaining $1.3 billion will come from each state’s traditional highway funds. In June the Federal Highway Administration approved the plan. Construction is slated to begin in 2013.
Carmen Hickerson, V.P. of public affairs and communications at Greater Louisville Inc., says creative funding for major highway projects is a must in today’s economic environment of limited federal funding. Large projects like these are increasingly difficult to fund without the inclusion of user fees. The Ohio River Bridges Project fortunately had two governors and a mayor who were willing to work together to find a solution. Through determination and partnership, Kentucky and Indiana overcame challenges and cleared the path for improved transportation for the region.
Paying for Infrastructure with the Gas Tax
Iowa lawmakers say gas tax increase is a 50-50 issue
Iowa’s senate majority leader says a substantial number of republicans and democrats in the state senate support investing in the state’s infrastructure. Iowa Gov. Terry Branstad’s Transportation 2020 Citizen Advisory Commission recommended raising registration fees for new vehicles by one percent, establishing a new user fee for hybrid vehicles and a phased gas tax increase equivalent to a 10-cent hike. Read more: Sioux City Journal
The extra mile: Maryland gas tax could increase
Maryland’s legislative session begins Wednesday, and a proposed hike to the gas tax will be a big issue. Watch the video for more details, including how money from the tax would be used: WUSA9
Minnesota tax cut on autopilot
On July 1, Minnesota’s highway fuel tax will go up a half-penny per gallon. Unless there is legislative action, it won’t go up again—ever. While some may cheer, others are considering what that may mean for the safety, comfort, efficiency and even the cost of driving in the long run. Read more: editorial from Minnesota 2020
How States are Building the Nation’s Transportation Systems Report
The National Conference of State Legislatures (NCSL) and the Center for Excellence in Project Finance at the American Association of State Highway and Transportation Officials (AASHTO) have partnered to produce a review of transportation governance and finance for all 50 states, D.C. and Puerto Rico. Read the full report here.
This report focuses on transportation finance and the roles and relationships among the branches of state government that are most active in transportation issues. The report also offers a rich diversity of approaches to govern, finance and ultimate deliver America’s transportation systems.
Brookings: Missed Opportunity Transit Report
It seemed fitting that on my way to the Brookings Institute yesterday morning for the presentation on Missed Opportunity: Transit and Jobs in Metropolitan America, I hit a typical DC traffic snag and crawled from Alexandria to DC for two long hours. I fancy myself to be a runner and smiled a weak smile of satisfaction when I discovered I could have run there faster than I could drive in my car. I then chastised myself for not taking the Metro to a Transit report unveiling. What was I thinking?
Brookings had a great line-up to discuss the roll out of the Missed Opportunity report. Robert Puentes, Senior Fellow at Brookings gave an overview of the study and there was a panel discussion about the implications of the findings followed by Secretary LaHood and Secretary Donovan discussing the federal role.
The real star of the show was the Missed Opportunity report. Visit Brookings site to read the full report and all of the supporting content. Be sure to check out the interactive map.
“Dr. Gridlock”, Robert Thomson, of the Washington Post moderated the panel of Keith Parker, CEO, Via Transit Systems, San Antonio, TX; Matthew Mahood, President and CEO, Sacramento Metro Chamber of Commerce; Ponsella Hardaway, Executive Director, Metropolitan Organizing Strategy Enabling Strength (MOSES); and Alan Berube, Senior Fellow and Research Director, Metropolitan Policy Program, from Brookings. Here are some of the things I sent out into the twittersphere during the panel:
Following the panel discussion, Bruce Katz joined Secretary Ray LaHood (Transportation) and Secretary Shaun Donovan (HUD) to talk about what the Feds are doing about transit. Secretary LaHood and Secretary Donovan have been working together very closely over the past two and a half years. Again, here are some notable quotes that I tweeted:
Again, here is the link for the Missed Opportunity page on Brookings site: Missed Opportunity: Transit and Jobs in Metropolitan America.