Michigan Department of Transportation

Michigan’s Infrastructure Needs and Funding

2013

Transportation Is The Backbone of Michigan’s Economy

35% of US/Canada trade flows through Michigan $520 billion in freight is moved each year on Michigan’s highways, rail and water ports Trucking accounts for 67% of all freight tonnage moved in Michigan

2

Operation of bus transit systems contribute an estimated $740 million to the economy each year

Passenger rail is expected to generate between $1.0-1.5 billion in net economic benefit annually

Aviation contributes more than $20 billion/year

80% of Michigan tourism isauto-based - $17.7 billion in total visitor spending in 2011

Transportation Is The Backbone of Michigan’s Economy

4

AssetAsset Management

Innovation and Efficiency

• MDOT has saved an average of $63M/year since 2009 on efficiencies & innovations. Some examples include:

– $48M: staff reductions & closed facilities

– $71M in one-time savings by bonding and process improvements

– $4M/year using electronic signatures for construction documents

– $22M in 2012 & 2013 by partnering with businesses & local governments & improving maintenance practices

– $4M/year in energy savings

$160

$180

$305

$326

$362

$444

$410

$518

$521

$610

$658

$624

$572

$667

$551

$442

$471

64%

67%

69%

73%

71%

75% 75%

78%

82%

86%

89%

92% 92%91%

91%

89%

87%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Per

cen

t P

avem

ent

in G

oo

d &

Fai

r C

on

dit

ion

Inve

stm

ent

Lev

el i

n M

illi

on

s

Investment Condition (percent good and fair) 6

Trunkline Pavement Condition has Peaked

Transportation Funding Roads and Bridges

Federal funds: $1 billion Includes $250 m to local agencies

State motor fuel taxes: $946 million State registration fees: $876 million

7

8

9

Statewide Average Salt Costs

$20.00$25.00$30.00$35.00$40.00$45.00$50.00$55.00$60.00$65.00

Statewide Average Salt CostsAverage Cost Per Ton

10

Time to Act

11

“Michigan is moving from underinvesting in transportation, to disinvesting

in transportation.” 2008, Transportation Funding Task

Force

“Michigan is moving from underinvesting in transportation, to disinvesting

in transportation.” 2008, Transportation Funding Task

Force

“Michigan’s roads continue to

deteriorate at an increasingly

rapid rate…” 2010, Transportation

Asset Management Council Report

“Michigan’s roads continue to

deteriorate at an increasingly

rapid rate…” 2010, Transportation

Asset Management Council Report

“If we are going to

reinvent Michigan’s

economy, we have to

reinvest in

Michigan’s

infrastructure.”

2011, Special

Message on

Infrastructure

“If we are going to

reinvent Michigan’s

economy, we have to

reinvest in

Michigan’s

infrastructure.”

2011, Special

Message on

Infrastructure

“Investments in infrastructure will grow the economy.” 2012, Business Leaders for Michigan

“Investments in infrastructure will grow the economy.” 2012, Business Leaders for Michigan

“The Pure Michigan campaign is

driving thousands of families to visit

our state, but if our roads and

bridges aren’t repaired, many won’t

be coming back.” 2012, Michigan

Lodging and Tourism Association

“The Pure Michigan campaign is

driving thousands of families to visit

our state, but if our roads and

bridges aren’t repaired, many won’t

be coming back.” 2012, Michigan

Lodging and Tourism Association

“You get what you pay for.” 2013, Michigan Farm Bureau

“You get what you pay for.” 2013, Michigan Farm Bureau

“Time is not on our side…The time to address this

problem is now.” 2012, Michigan Roads Crisis report

by House Transportation Working Group

“Time is not on our side…The time to address this

problem is now.” 2012, Michigan Roads Crisis report

by House Transportation Working Group

“Investing money in our roads and bridges today saves money in the long run..” 2013, Gov. Rick Snyder

“Investing money in our roads and bridges today saves money in the long run..” 2013, Gov. Rick Snyder

“…families will save on vehicle repair costs, our state will save $13 billion over the long run…we will save 100 lives each year… what’s more, we’ll create over 12,000 jobs…” 2013, Gov. Rick Snyder

“…families will save on vehicle repair costs, our state will save $13 billion over the long run…we will save 100 lives each year… what’s more, we’ll create over 12,000 jobs…” 2013, Gov. Rick Snyder

“…creating a disincentive for big employers, especially those who rely on highway infrastructure to do business, to locate here..” 2008, Kalamazoo Gazette

“…creating a disincentive for big employers, especially those who rely on highway infrastructure to do business, to locate here..” 2008, Kalamazoo Gazette

“If we are going to reinvent Michigan’s

economy, we have to reinvest in Michigan’s infrastructure.” 2011, Special

Message on Infrastructure

“If we are going to reinvent Michigan’s

economy, we have to reinvest in Michigan’s infrastructure.” 2011, Special

Message on Infrastructure

“…Michigan had the eighth worst road system in the nation based on overall performance. Grinding all of our roads back into the stone age is not an acceptable alternative.“ 2009, Muskegon Chronicle

“…Michigan had the eighth worst road system in the nation based on overall performance. Grinding all of our roads back into the stone age is not an acceptable alternative.“ 2009, Muskegon Chronicle

Raising taxes isn't easy in a

bad economy, but this is one

case where, if the money is

properly managed, it would

offer a worthwhile return on

the investment...” 2009,

Detroit News

Raising taxes isn't easy in a

bad economy, but this is one

case where, if the money is

properly managed, it would

offer a worthwhile return on

the investment...” 2009,

Detroit News

“Transportation infrastructure

must become a priority. …”

2011, Lansing State Journal

Editorial

“Transportation infrastructure

must become a priority. …”

2011, Lansing State Journal

Editorial

Conditions are Getting Worse

12

Pay Now or Pay Later

13

The Cost of Doing Nothing

• Costs of an inadequate system– $11.6 billion annually – lost time, wasted fuel, crashes, etc.

• $3,014 annually per driver

– $370 per driver per year for auto repairs due to poor roads

• Safety impacts of an inadequate system– Total crashes in 2011: 284,049– Total cost of crashes : $8.25 billion– Total fatalities: 889– Total injuries: 71,796

14

Benefits of Acting Now

• The economic impacts in the first two years:– 12,000 jobs each year– $1.598 B in personal income– $2.92 B in Gross State Product

• In the next 10 years, this $1.2 billion/year investment will generate:– Over $10 billion in real personal income– More than $24 billion in Gross State Product

• PLUS, better roads & transit, greater efficiency, improved safety 15

STATE STATE PROFILE (thousands) STATE INVESTMENT ALLOCATION (thousands)

Total Funding Funding PerFunding Per Pop. Lane Mile

MICHIGAN 9,834 7,822 97,567,000 257 $1,709,199 $174 $6,651Illinois 12,831 10,789 105,788,000 293 $3,017,527 $235 $10,299Indiana 6,484 5,698 75,761,000 200 $1,215,322 $187 $6,077Minnesota 5,304 4,848 56,632,000 284 $1,672,190 $315 $5,888Ohio 11,537 9,800 111,836,000 262 $2,706,474 $235 $10,330Wisconsin 5,687 4,968 59,420,000 237 $1,315,897 $231 $5,552

Registered Vehicles Annual VMTPopulation

Lane Miles

REGIONAL COMPARISON

16

17

Impact Could Be Felt in 2013

• If action is swift, work can begin this summer– If not, real progress will be delayed to next summer

• Transportation agencies and contractors are eager to do the work– MDOT’s program and lettings are 1/3 less in 2013 than

what they were 4-5 years ago ($650M vs. $930M)

18

Questions?

“Providing the highest quality integrated transportation services for

economic benefit and improved quality of life.”

19