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Gas Tax? Tolls? Michigan Gov. Says Enough, ‘I’m Issuing Bonds’ For Road Projects | Columbus Ohio Dump Trucks

Project Finance

State Senate pushes back by passing bill that ask to hire a toll road study consultant


Michigan Governor Gretchen Whitmer speaking in Lansing in June 2019.

She has decided conventional debt financing is needed to finance road and bridge work. Photo: Jim West/ZUMA Wire via Newscom

Mich. Gov. Gretchen Whitmer (D) is attempting to clear through the political deadlock that has held up a broad bridge and road rebuilding program with a multibillion-dollar debt finance plan.

Up until now, Whitmer had failed to win over Republicans when she proposed last year a plan based on a 45-cent-per-gallon road tax.

Whitmer outlined her new plan Jan. 28 in a state-of-the state address delivered in Lansing. Before giving her speech, she told the Detroit Free Press that she understood that state Republicans were drawing up plans for a state sales tax dedicated to roads.

In Whitmer’s new plan, which she dubbed “Plan B,” Michigan would use traditional debt financing through bonds. She implied that she had the authority to issue the bonds without a bill that would have to make its way through the state legislature.

She said she would direct the State Transportation Commission to issue the bonds to add or expand 122 projects over the next five years. “We can get to columbus oh dump truck work on these state trunkline roads and freeways and take advantage of today’s low interest rates,” she said. A day before the speech, Senate Majority Leader Mike Shirley (R) said that all types of financing plans should be considered and called for more research and study of the issue.

By a 31- 7 vote, the state senate approved a bill that would require the Michigan Department of Transportation to hire an outside consultant to study the feasibility of putting toll booths on Michigan highways. The study would have a cost of up to $150,000, and a contract with a third party would be subject to a separate approval. The bill — SB 517 — still has to go to the House to even reach Whitmer's desk.

All kinds of ideas that had previously been put forward last year as an alternative to a gas tax, Whitmer said, and all were flawed. She didn’t consider them serious.

“Diverting money from the teacher pension system to fill some potholes… come on," she told state lawmakers. "Selling bridges… not serious. And letting roads turn back into gravel… I don’t think so. Any proposal that creates more problems than it solves is NOT a serious solution. So, it’s time for Plan B: executive action.”

Read more about the possibility of tollroads in Michigan here.