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. Gretchen 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 is an opportune time to raise the federal gas tax, last increased in 1993, not indexed to inflation, which has increased 77 percent since then. Writing in The Hill, 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.

https://thehill.com/opinion/finance/492748-this-is-prime-time-to-increase-the-federal-gasoline-tax

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, replenish the Highway Trust Fund, and rebuild America’s critical road and bridge infrastructure.

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. “Today’s announcement … is an important step forward on the path to rebuilding America’s infrastructure.”

Says House Transportation Chairman Peter DeFazio, D-Oregon: “And just like the New Deal of the 1930s, the best way to re-start our economy and put workers first is with a massive investment in the kind of infrastructure that will help future generations succeed - from better bridges and roads to robust transit and passenger rail service, to fully functioning ports and harbors, to modernized waste and drinking water systems, and widely available broadband internet.”

U.S. Senate Majority Leader Mitch McConnell, R-Kentucky, after initially balking at aid to states in another round of stimulus and suggesting they could default, amended his stance and suggested there could be some relief. But his and administration proposals come with what Democrats consider some poison pills, calling for a pandemic liability shield and payroll tax cuts.

https://www.usnews.com/news/economy/articles/2020-05-05/liability-protection-looms-over-next-coronavirus-stimulus-package

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 (STC) to authorize bonds to rebuild some of the state’s busiest freeways. The STC voted to authorize up to $3.5 billion in bonds.

https://www.michigan.gov/mdot/0,4616,7-151-9621_14807_14810_59639---,00.html

The first project in the plan, the rebuild of I-496 west of Lansing, began April 1. McCarthy explains that the project is being funded with existing revenue that will be reimbursed when the bonds are sold.

https://www.m