MML Capital Conference
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Transcript of MML Capital Conference
MMLCapital Conference
MMLCapital Conference
Director Kirk T. Steudle, P.E.Michigan Department of Transportation
March 4, 2009
Tough Times For Transportation Funding
Declining gas tax revenues
Declining state revenues for aviation, highways and transit
Uncertain federal revenue
+ Increasing costs
= Uncertainty
Click to Continue
Michigan is Experiencing a Transportation Funding Crisis
At current funding levels, the condition of Michigan’s transportation infrastructure will decline.
Click to Continue
- Michigan's gas tax is 19 cents per gallon. Michigan's gas tax has not been increased since 1997.
- Registration fees have been declining due to motorists purchasing fewer new vehicles
Click to Continue
Where Does the Money Come From?
Michigan’s primary sources of transportation funding are the state gas tax and vehicle registration fees.
$1.7 Million
Replacing a bridge deck - $1.7 million
(5-lane deck)
$800,000
Resurfacing asphalt - $800,000 (2 lanes for one mile)
$3,000
Winter maintenance – $3,000 per lane mile (plowing and salting)
Up TO
$500,000
Urban Transit Bus – $300,000 to $500,000
What’s the Average Cost?
27% of North American land-based trade goes through Michigan
37% of North American rail trade moves through Michigan
Detroit Metropolitan Wayne County Airport (DTW) is the 10th-busiest airport in North America and
the 20th-busiest airport in the world
Michigan’s Transportation System Is Important on a Global Scale
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Where Do We Rank?
Since the 1960s, Michigan has been in the bottom 10 states for state and local transportation funding.
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Our Funding Doesn't Go as Far as It Used To
Due to Inflation, the 19 cent state gas tax is now only worth 14.7 cents.
State Gas Tax has dropped in value 22.6%
ThenNow
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Gas Tax Revenue Is No Longer the Answer
New fuel efficient vehicles and hybrids have further cut gas tax revenue.
Michigan gas tax revenue has decreased $100 million in the past five years.
Click to Continue Click to Continue
Road Construction Costs Keep Growing
Asphalt costs are up 32.4% from 2002 to 2006.
Concrete costs are up 21% from 2002 to 2006.
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Older Roads and Bridges Require More Maintenance
Michigan roads and bridges are aging, and carry higher volumes of traffic than all but eight other states.
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Winter Weather Is Harsh on Our Roads
Roads in Michigan are exposed to severe weather and harsh freeze/thaw cycles.
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Positive Gains Made in Road Conditions Are at Risk
In 1996, only 64% of state highways were in good condition.
In 2007, Michigan’s goal of 90% of all state highways in good condition was achieved.
By 2014, these gains will be lost.
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How Does This Affect Me?
Time lost in traffic, wasted fuel, and crashes costs Michigan drivers $7 billion each year.
That’s $1,671 per driver.
Click to Continue
At the current funding level, Michigan will lose jobs.
The decline in buying power of MDOT's funding
from 2006 to 2010 would mean a loss of more than 12,000 jobs.
Jobs Would Be Lost in All Sectors of the Economy
Click to Continue
New Economic Recovery Package:Not the Cure
President Obama signed a one-time economic recovery package totaling $48 B for transportation
Package = roughly 1 year’s worth of typical federal monies
Monies would not support maintenance and other services
Recovery package funding does not solve long-term transportation funding problems
Not the Cure For Michigan’s Transportation Funding Ills
2009-2013 Transportation Revenues
MDOT Highway and Maintenance ProgramState Revenue Shortfall and Federal-Aid Lost
$629$700
$111 $124
$630
$418**$524**$477**
$1,265*
$576
$102
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
2009 2010 2011 2012 2013Year
mill
ion
s
Program Total with Routine Maintenance Federal Aid LostState Revenue Shortfall Federal Stimulus
* 2009 Announced Highway and Maintenance Capital Program
** Resulting Program Amount (w ith declining state revenues and inability to match available federal aid)
$1,239