Legislative Update

Governor signs “Local Jobs Today” legislation
Program provides federal match to local communities and road agencies

This week Governor Jennifer Granholm signed legislation to provide $80 million in much-needed state funding to expedite $400 million in local road projects in 2006 and 2007.

“This is great news for Michigan’s economy”, said Mike Nystrom, vice president of government and public relations for MITA. “This plan will create 7,100 jobs and start dirt flying on critical road projects by September of this year.”

The newly signed Local Jobs Today legislation makes $320 million in federal transportation funding available to cities, counties and local transit agencies through grants and loans to pay for the required local match. Projects are expected to be bid as early as mid-summer and will continue into 2007.

“While we are encouraged by this legislation, we also know this is a short-term fix for a long-term problem,” Nystrom said. “Michigan has a $700 million shortfall in funding just to maintain our state roads and an even greater need on the local level. This is an issue state policy makers must address very soon.”

State appropriations bills gain momentum

Appropriation bills in the House and the Senate are making their way through their respective chambers. The Legislature is hoping to get final passage of state budgets by June 15, 2006.

This week the House and Senate reported most state budgets out of the chamber of origin. The state transportation budget is part of the House omnibus budget, House Bill 5795, which has now been referred to the Senate.

MITA has been actively involved in the budget process for the past month, working to reduce the $40 million of MTF money being siphoned away from road projects and sent to other government agencies. MITA has also been working to reduce these “inter departmental grants” and require the state departments to justify their transportation-related “expenses”. In addition, MITA has fought off attempts to promote another crumb rubber initiative for the mix design for asphalt as well as promoting language that will force local agencies to spend their road money on transportation projects rather than diverting it to snowplows, salt and additional employees.

A supplemental budget with over $20 million in previously vetoed road projects is also in the final stages of legislative approval.

Statewide ballot proposals harmful to state infrastructure 

Two potential proposals that may make it on the November statewide ballot could put the squeeze on road and infrastructure projects for years to come.

The “Stop Over Spending” (SOS) initiative allows state spending to increase only at the rate of inflation plus population growth. Although it sounds good in theory, the state purchases things that individuals don’t—like roads, corrections and health care for the poor—the cost of which grows faster than the rate of inflation.

Locally funded infrastructure projects could dry up as the Legislature slashes one of the last areas of discretionary spending—revenue sharing payments to local units of government.

In addition, the proposal would require entire communities to vote for sewer and drainage assessments, even though it may only effect a limited number of residents.

In addition to the SOS proposal, the K-16 initiative requires the state to spend an additional $1 billion for local schools immediately and then requires funding increases at the rate of inflation every year after. Approval of this proposal would mean state policymakers would have no discretion to invest in infrastructure or other needed areas, as all available revenue would be earmarked for one special interest.

Information on the K-16 proposal can be found at www.stopthespendingmandate.com.

MITA will keep you updated on all of these important issues. If you have any questions please contact Mike Nystrom, Vice President of Government and Public Relations at mikenystrom@mi-ita.com or Keith Ledbetter, Director of Legislative Affairs at keithledbetter@mi-ita.com or by calling the MITA office at (517) 347-8336.