In a sight that could become more commonplace by year’s end, the state of Michigan is being forced to cancel $740 million in road and bridge repairs after its gas tax revenues fell short of the level required to secure matching funds from the federal government.
The matching-funds deal requires states to pay 20 percent of the costs of most highway projects, with the federal government kicking in the 80 percent that remains. But thanks to lower gas-tax revenues brought on by diminished driving and the government’s refusal to increase the tax, economically devastated Michigan is unable to kick in its share for more than 130 projects.
Transit fans are likely to wonder why this is such bad news, given that their preferred projects are forced to line up state and local support without the lucrative federal matching funds that highways receive. Yet many of Michigan’s canceled transportation projects are not misguided Roads to Nowhere.
Provided the whole thing doesn’t collapse, I guess it will be business as usual.
Michigan’s problems speak to the need for a federal solution to the funding insanity that’s resulting from Americans’ welcome decision to drive less (and Congress’ unwelcome decision to let the gas tax depreciate). For one thing, California could be next — its budget meltdown has prompted Gov. Arnold Schwarzenegger (R) to consider siphoning off local gas tax revenues, which would in turn endanger federal matching funds that were destined for local road and bridge repairs.
Rep. Candice Miller (R-MI) plans to introduce legislation on Capitol Hill that would give a Michigan a short-term exemption from the rules that govern transportation matching funds. Still, it’s tough to envision her effort succeeding, for one principal reason: If Michigan gets help, 48 other states — minus Alaska, which rakes in the revenue from Washington — will be lining up with the same request.