Brian Calley President and Chief Executive Officer at Small Business Association of Michigan | LinkedIn
Brian Calley President and Chief Executive Officer at Small Business Association of Michigan | LinkedIn
The Michigan Department of Transportation (MDOT) is set to receive over $6.8 billion in funding for Fiscal Year 2025, aimed at maintaining the state's roads and bridges. However, the issue of replacing the gas tax remains unresolved.
MDOT Director Brad Wieferich expressed satisfaction with the budget increase of nearly $181.4 million, bringing the total to approximately $2 billion allocated for state trunklines and bridge maintenance. "There’s still more that we need to discuss with the Legislature about long-term sustainable funding that we can count on in order to make sure that we can get our system to the condition that we all know we want," Wieferich said.
MDOT Communications Director Jeff Cranson highlighted a one-time allocation of $76 million intended as a state match for federal funds from the Infrastructure Investment and Jobs Act (IIJA). He noted this amount addresses a gap between budget needs and available funds. "That’s an example of how traditional revenue streams are not keeping pace," Cranson stated.
Despite these efforts, MDOT faces challenges such as a $483,800 reduction in the Local Bridge Fund due to decreased gas tax revenue. Wieferich emphasized that MDOT has not endorsed any specific method to replace the gas tax but aims to provide multiple options.
State Rep. Ken Borton (R-Gaylord) pointed out that while local roads were not directly funded, nearly $2 billion from the gas tax was allocated for distribution to local road agencies. Additionally, local federal aid for roads and bridges will increase by nearly $385 million through IIJA provisions.
Borton criticized a proposed allocation of nearly $24 million for new technology and mobility initiatives, arguing it was unnecessary: “People in northern Michigan couldn’t care less about drones and electric bikes."
Other notable budget allocations include:
- A one-time appropriation of $2 million to decarbonize the Lake Michigan car ferry, S.S. Badger.
- A one-time allocation of $5 million aimed at assisting economically disadvantaged businesses.
- Nearly $1 million for equipment purchases and facility updates at Blue Water Bridge.
- Over $7 million for operations at Port Huron's international bridge.
- A one-time fund of $6 million dedicated to revitalizing airports across Michigan.
- Increased funding for Detroit Metropolitan Wayne County Airport totaling $6.37 million.
- An additional phased-in aircraft registration fee increase resulting in nearly $180 million for the Airport Improvement Program.
- IIJA grants totaling $95 million earmarked for airport infrastructure improvements in Michigan.
- Federal grants worth $15.1 million made available through IIJA for public ferry services.
Local bus operations will experience a decrease of $25 million following the removal of American Rescue Plan funds; however, baseline comprehensive transportation fund support will see a rise by nearly $10 million, reaching approximately $217 million.
No funds have been designated specifically for research into potential replacements for fuel taxes, though Wieferich mentioned MDOT's request for a grant to conduct a pilot study on road usage as part of long-term planning considerations.
“That’s a longer term issue, but it is something that we need to think about,” he concluded.
Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter
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