Talking Michigan Transportation: Federal stimulus for roads and Rebuilding Michigan
This week’s Talking Michigan Transportation podcast includes conversations about whether the federal government will provide any relief for transportation agencies in the wake of declining fuel tax revenues because of the pandemic. First, Lloyd Brown, director of communications at the American Association of State Highway and Transportation Officials, offers his analysis of the ongoing Congressional discussions.
Later, MDOT Finance Director Patrick McCarthy talks about Gov. Whitmer’s Rebuilding Michigan program and plans to sell some of the bonds this year.
Will there be help from Washington?
Many scholars and analysts have argued that this an opportune time to raise the federal gas tax, last increased in 1993, not indexed to inflation, which has increased 77 percent since then. Jeff and Lloyd talk about an op/Ed in The Hill, where Bernard L. Weinstein, associate director of the Maguire Energy Institute and adjunct professor of business economics in the Cox School of Business at Southern Methodist University, makes the case for doing something now.
The inflation-adjusted cost of gasoline today is about where it was 50 years ago. Weinstein questions whether Congress will squander a unique opportunity to hike the federal gasoline tax and replenish the Highway Trust Fund.
His thinking is in line with that of the U.S. Chamber of Commerce which has advocated for a 25-cent increase in the federal gas tax. “Our nation’s infrastructure is deteriorating and only getting worse. By 2025, our crumbling infrastructure will cost American businesses $7 trillion,” said Chamber CEO Tom Donohue.
Will Congress agree on another round of stimulus that includes aid to states and cities and funding for roads and bridges? The debate revolves around the administration’s push for payroll tax cuts and some lawmakers’ advocacy for a pandemic liability shield.
Rebuilding Michigan
MDOT’s McCarthy explains the bond sale process and how it will support the Rebuilding Michigan plan. Earlier this year, Gov. Whitmer asked the State Transportation Commission to authorize bonds to rebuild some of the state’s busiest freeways. The STC voted to authorize up to $3.5 billion in bonds.
Meanwhile, other states are eyeing bond sales to shore up funding. In Texas, where Transportation Commission is preparing to issue $880 million of general obligation refunding bonds.
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