Michigan Transportation Infrastructure Needs and Funding Solutions

In 2016, the State of Michigan’s 21st Century Infrastructure Commission estimated that Michigan needs to invest an additional $2.2 billion in roads and bridges each year to meet established goals for state road and bridge quality. If multimodal transportation (e.g., bus transit, passenger rail, and freight) needs are considered, the annual total rises to $2.6 billion.

In 2022, to better understand the impact of additional funding on Michigan’s infrastructure needs, the Michigan Infrastructure and Transportation Association (MITA) approached Public Sector Consultants (PSC) to update the transportation infrastructure estimates in the 21st Century Infrastructure Commission report and review potential solutions to fill the long-term funding gap.

This report outlines the overall costs to maintain Michigan’s road network, current road funding estimates and revenue sources, as well as potential options for raising additional revenue to close the funding gap. In developing the estimated funding gap, PSC found:

• Michigan’s transportation system needs are likely higher than previous estimates. PSC estimates that Michigan’s transportation network cost $9.0 billion per year to operate and maintain and could reach upward of up to $16.7 billion per year with limited or deferred maintenance.
• Investment in recommended maintenance can save Michigan residents money. Spending to maintain and rehabilitate roads (called “the right fix at the right time”) is more cost effective than waiting until a lane mile has reached the end of its design life, when reconstruction becomes the only option. PSC estimates that proper maintenance can save between $3.0 and $7.6 billion per year.
• Michigan has set a standard of maintaining roads at a 90% good and fair condition level, which has not been accomplished on a sustainable level because of a lack of funding, and it will cost more to bring the system up to standard. MDOT assessments of Michigan road conditions show that 33 percent of all federal-aid roads and 45 percent of non-federal-aid roads are in poor condition and should be reconstructed in the next two years.
• There is a $3.9 billion annual funding gap—and depending on the maintenance approach, that funding gap could be much bigger. PSC’s model includes estimates for the formula funding portion of the bipartisan IIJA as well as the RBMP, the state’s bonding plan.