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Report of the Transportation Funding Task Force

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Report of the Transportation Funding Task Force Transportation Solutions A Report on Michigan’s Transportation Needs and Funding Alternatives The Report of The Michigan Transportation Funding Task Force Prepared for Governor Jennifer Granholm and the Michigan Legislature November 10, 2008 Transportation Funding Task Force Report Transportation Funding Task Force Report Table of Contents Table of Contents -------------------------------------------------------------------------- ii List of Figures ------------------------------------------------------------------------------iii Transportation Funding Task Force Members ------------------------------------------ iv Citizens Advisory Committee Members---------------------------------------------------v Executive Summary ----------------------------------------------------------------------- vi Section 1: Introduction ------------------------------------------------------------------- 1 Section 2: Guiding Principles ------------------------------------------------------------ 3 Section 3: Investment Needs by Mode ------------------------------------------------- 5 Section A - Aviation ----------------------------------------------------------------------- 6 Section B - Highways, Roads, and Bridges--------------------------------------------- 13 Section C - Intermodal Freight ---------------------------------------------------------- 20 Section D - Intermodal Passenger ------------------------------------------------------ 25 Section 4: Current Efficiencies ---------------------------------------------------------- 33 Section 5: Recommended Efficiencies -------------------------------------------------- 39 Section 6: General Recommendations ------------------------------------------------- 47 Section 7: Aviation Funding Alternatives---------------------------------------------- 50 Section 8: Surface Transportation Funding Alternatives ---------------------------- 52 Section 9: Miscellaneous Reforms------------------------------------------------------ 57 Section 10: Return on Investment ----------------------------------------------------- 58 Section 11: Conclusion ------------------------------------------------------------------ 61 Section 12: List of Appendices---------------------------------------------------------- 62 ii Transportation Funding Task Force Report List of Figures Figure A: Summary of Transportation Investment Scenarios -------------------------- x,32 Figure B: Summary of Funding Alternatives --------------------------------------------- xi Figure 1: Air Freight Forecast (Intrastate Shipments) --------------------------------- 8 Figure 2: Federal Aviation Funding Sources --------------------------------------------- 9 Figure 3: State Aeronautics Fund (SAF) Revenue - ------------------------------------- 10 Figure 4: Historical Motor Fuel and Aviation Fuel Tax Rates --------------------------- 10 Figure 5: Aviation Investment Options (FY 2009-2030) ------------------------------- 11 Figure 6: Distribution of the Highway, Road, and Bridge System --------------------- 14 Figure 7: Condition of the Federal-Aid-Eligible Roads in 2007 ------------------------ 14 Figure 8: 2008 Bridge Conditions on the Federal-aid System ------------------------- 15 Figure 9: MTF Revenue Sources ---------------------------------------------------------- 15 Figure 10: Mix of Fuel Tax and Registration Revenue in MTF -------------------------- 16 Figure 11: Highway, Road, and Bridge Investment Options --------------------------- 19 Figure 12: Michigan Freight Movements in 2003 --------------------------------------- 21 Figure 13: Top Commodities Moved by Trucking in 2003 ------------------------------- 21 Figure 14: Top Commodities Moved by Rail in 2003 ------------------------------------ 22 Figure 15: Passenger Transportation Investment Options ----------------------------- 29 Figure 16: Preliminary Recommendations – Efficiencies and Reforms ---------------- 46 Figure 17: Jobs Created/Sustained for Each Investment Scenario -------------------- 58 Figure 18: Summary of Economic Benefits at the “Good” Level ----------------------- 59 Figure 19: Potential Investment Return to Households ”Good” Investment Level--- 60 iii Transportation Funding Task Force Report Transportation Funding Task Force Members Dennis H. Gillow, Co-Chairperson, Treasurer, International Union of Operating Engineers Local 324, representing Labor Richard K. Studley, Co-Chairperson, President and CEO, Michigan Chamber of Commerce, representing Commerce Senator Glenn S. Anderson, Michigan State Senator 6th District, representing the Senate Democratic Caucus Representative Pam Byrnes, Michigan State Representative 52nd District, representing the House Democratic Caucus Cindy B. Elliott, Global Supply Chain Sourcing Director, Dow Chemical Co., representing Manufacturing Senator Judson Gilbert, Michigan State Senator 25th District, representing the Senate Republican Caucus John A. James, Chairman, James Group International, Inc., representing Transportation Ann M. Jousma-Miller, Executive Director, Delta County Economic Development Alliance, representing Agriculture Representative Philip J. LaJoy, Michigan State Representative 21st District, representing the House Republican Caucus Michael A. Nystrom, Vice President of Government and Public Relations, Michigan Infrastructure and Transportation Association, representing the General Public Roger F. Salo, Director of Aviation, Masco Flight Operations, representing Aviation Peter J. Varga, CEO, The Rapid, representing Public Transit L. Susan Zehnder, Vice President of Human Services, Zehnder’s of Frankenmuth, representing Tourism iv Transportation Funding Task Force Report Citizens Advisory Committee Members Gretchen D. Driskell, Chairperson, Mayor, City of Saline, representing the Michigan Municipal League Brent Bair, Managing Director, Road Commission for Oakland County, representing the County Road Association of Michigan Mickey Blashfield, Director of Governmental Relations, Central Transport International, Inc., representing the Michigan Trucking Company Gloria Combe, Principal, Combe Consultants, Inc., representing the Michigan Railroads Association Daniel M. DeGraaf, Executive Director and CEO, Michigan Concrete Paving Association, representing same Michael W. Fikes, Legislative and Community Relations Director, Michigan Laborers’ District Council, representing the Michigan Building and Construction Trades Council William E. Gehman, Senior Aviation Consultant, Mead & Hunt, Inc., representing the Michigan Business Aviation Association Russell A. Gronevelt, President, Orchard, Hiltz & McCliment, Inc., representing the American Council of Engineering Companies Kari L. Hughston, Office Manager, Lum Hughston Trucking LLC, representing the Michigan Farm Bureau James A. Klett, Manager, Klett Construction Company, representing the Asphalt Paving Association of Michigan James A. Koslosky, Aeronautics Executive Director, Gerald R. Ford International Airport, representing the Michigan Association of Airport Executives Keith P. Ledbetter, Director of Legislative Affairs, Michigan Infrastructure and Transportation Association, representing same William A. McFarlane, Township Supervisor, Superior Charter Township, representing the Michigan Townships Association Linda Miller Atkinson, State Transportation Commissioner, Attorney, Atkinson, Petruska, Kozma & Hart, representing the General Public Sylvester Payne, General Manager, Saginaw Transit Authority Regional Services, representing the Michigan Public Transit Association Steward E. Sandstrom, President and CEO, Kalamazoo Regional Chamber of Commerce, representing the Michigan State Chamber of Commerce Kirk Steudle, Director, Michigan Department of Transportation, representing same Robert C. Struck, Executive Director, UP-EMS Corporation, representing the Michigan Association of Counties v Transportation Funding Task Force Report Executive Summary The Transportation Funding Task Force was created in response to Public Act 221 of 2007 (P.A. 221 or Act 221), legislation which passed both the Michigan Senate and House of Representatives with a bipartisan majority and was signed into law by Governor Jennifer Granholm in December 2007. The Task Force is comprised of 13 members. Nine represent interests including manufacturing, labor, transportation, agriculture, aviation, commerce, public transit, tourism, and the general public. Four members of the Legislature also serve on the Task Force, representing each legislative body and each side of the political aisle. The purpose of the Task Force, as defined by P.A. 221, is to “review the adequacy of surface transportation and aeronautics service provision and finance” in Michigan, review strategies for maximizing return on transportation investment, and evaluate the potential of alternative strategies to replace or supplement transportation taxes and fees. A major and consistent focus of the group has been the need to stimulate economic activity and enhance personal mobility. As they began their work seven months ago, the members of the Task Force very quickly realized the enormity and importance of the task that had been appointed to them. Hard Truths What the Task Force ultimately determined, after months of hard work and much public input, is that if Michigan’s transportation system is to continue to serve the state adequately, our investment in transportation must increase significantly. Road-user fees for a typical Michigan auto driver come to just pennies over $1 per day. The typical auto driver pays 2½ cents per each mile driven;
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