Saturday, June 22, 2019

Quit spending money on what is nice to have and start spending the money on what we need to have.

From Michigan Roads Declined Even As Funding Rose Sharply by Holly Matkin and Tom Gantert.
According to a recent state report, 40% of the Michigan roads evaluated in 2018 were in poor condition. The proportion of roads in bad shape has increased from a low of just 10% in 2004, rapidly at first but then more slowly. The initial decline in quality occurred during a period of stagnant transportation spending, but the trend continued even after state funding increased after 2012.

This suggests that the link between higher spending on roads and better pavement quality over time is complicated.

The percentage of Michigan roads in poor condition was just 10% in 2004. The figure rose to 33.77% in 2013, and stood at 40.51% in 2018, according to a state Transportation Asset Management Council report. State transportation funding was stagnant-to-lower during the first part of that period. The 2013 transportation budget authorized spending $2.19 billion in state tax money, a $500 million decline after adjusting for inflation.

But state transportation spending began increasing in 2013, and by 2018 it had risen to $3.16 billion. More spending did not translate into fewer roads in poor condition, however. In 2018, poor roads made up 40.51% of those assessed.

In a seeming paradox, the percentage of Michigan roads rated as “good” by state transportation officials has remained relatively the same over the past 13 years, even as the proportion at the other extreme rose.
Why is this happening? Matkin and Gantert have a couple of answers.
Another factor that complicated the picture was state debt: The state borrowed to pay for more road repairs in the short run but at the expense of reducing the amount of money available in subsequent years. Between 2000 and 2009, the amount owed for past road repairs rose from $600 million to $2.3 billion. Paying the principal and interest on this debt has meant that since 2009, the state has had around $200 million a year less for current road repairs.
And the solution? Increase taxes.
Whitmer has called for increasing the gas tax by 45 cents per gallon. Spending would be concentrated on the most highly traveled roadways, with just six percent earmarked for local bridges and rural economic corridors.
Sorry. Let's quit being polite. The Atlanta experience is instructive. After a couple of decades of road disinvestment, conditions got so bad that politicians convinced voters to issue a $250 million bond to do routine maintenance. An egregious solution not acceptable in public finance 101.

Citizens were concerned about creating a honey pot. As well they should be. Despite the promised safeguards to ensure the money would be spent on roads, next time someone looked at the funds, they realized most of it was gone and little of it went on roads. All sorts of white elephant projects from pools to new public trails.

Going through an exercise of trying to appear like responsible adults, the elected officials went through the handwaving and hurrahing of a rationalization process to focus the few remaining dollars on roads. And still a third of the resulting projects had nothing to do with roads.

So what is the base problem? It is nothing but bad behavior by our elected officials and the bad behavior of the electorate for tolerating that bad behavior by electing them again. Quit spending money on what is nice to have and start spending the money on what we need to have.

Sorry Michigan. Its that simple. And that hard.

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