Governor Proposes New Water Fee
In his last year as Governor, Rick Snyder is continuing his strong advocacy for improving infrastructure in Michigan. This week the Governor spent every day bringing attention to different aspects of infrastructure and environmental improvement. The most significant announcement he made during this infrastructure week was proposing a new water fee for all Michigan residents that would raise funds for underground infrastructure projects across the state.
The proposal would create a new $5 per person annual water fee that would generate approximately $110 million each year. The fee would be phased in starting at $1 and would be fully implemented by 2025. Revenue from the new fee would be split up into three separate categories, all dealing with underground infrastructure. The first would be $25 million to an integrated asset management program for all infrastructure in Michigan. The second would be a capital grant and loan program that would take $75 million annually and allow local communities an opportunity to receive state money to help with items like lead service line replacement and water, sewer and stormwater capital projects. The third would set aside $10 million for an emergency infrastructure failure fund to help with situations like the Fraser Sinkhole and the Flint Water Crisis.
MITA was asked to help with the rollout and development of this proposal, and we will be aggressively advocating for its passage within the legislature. Recent polls show that there is strong support in the public for increased investment in infrastructure and that they are willing to pay more so long as they can see results. One of the aspects of this new water fee proposal is that 80% of all the money generated would be returned to the region that it was generated in. Quite often the public feels as though they are paying higher taxes and not seeing any direct benefit of doing so. This proposal would ensure that does not happen.
Attached are a few PDFs that explain the proposal in more detail.
Governor Asks For More Road Funding Money in State of the State Address
In his final State of the State address, Governor Snyder announced that he would be asking the legislature to accelerate the general fund responsibilities of the road funding package that passed in 2015. The 2019 budget will be the first budget to see the general fund portion of the road funding bill put into the transportation budget. Statutorily, $150 million is shifted to transportation from the general fund the first year, $325 million is shifted in the second year and the full $600 million is scheduled to shift in 2021. The other $600 million of the $1.2 billion increase comes from gas tax and registration fee increases that have already gone into effect.
Governor Snyder is expected to request that $325 million be directed from the general fund for the 2019 budget in his budget presentation to the legislature next week. The state is seeing some moderate growth and has some extra revenues they can spend. The Governor, along with many rank and file legislators, believes that fixing our roads and bridges are a great way to utilize the additional funds. MITA has been working closely with the appropriations chairs in the House and Senate, as well as with leadership in both chambers to encourage them to follow the Governors’ recommendations.
President Trump Announces a $1.5 Trillion Infrastructure Plan
In his first State of the Union address, President Donald Trump proposed a $1.5 trillion infrastructure plan with very little details behind it. In his speech he said, “I am calling on the Congress to produce a bill that generates at least $1.5 trillion for the new infrastructure investment we need. Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment — to permanently fix the infrastructure deficit.”
MITA has learned that for the federal portion of the $1.5 trillion plan, $200 billion would come from somewhere in the federal government. That means that the other $1.3 trillion would have to come from local communities and states. The plan proposes to have a 20% match of federal dollars for projects while requiring 80% of the total project costs to come from other sources.
Because of the low level of commitment coming from the federal portion, the proposal has been met with some significant push back. As we all know in Michigan, states and communities do not have extra funds they aren’t already using for infrastructure repairs. While under the proposal Michigan might see some increases to their transportation budget, if passed in its current proposed form not a lot of increase would occur.
MITA is constantly communicating with our federal transportation partners and with members in Congress to monitor how this proposal and others are moving through the process. We anticipate a significant debate this year on the federal level about investing in our nation’s infrastructure.
If you have any questions on any of these topics, please feel free to contact Mike Nystrom, Executive Vice President, at mikenystrom@mi-ita.com or Lance Binoniemi, Vice President of Government Affairs, at lancebinoniemi@mi-ita.com. They both can also be reached at 517-347-8336.
