Will Snyder avoid Reagan's mistake on road taxes?

 

David Stockman, who served as Ronald Reagan’s high-profile budget director, spends quite a bit of time these days writing a blog that proudly displays a contrarian view.

One of Stockman’s posts dating back to April 2014 served as an attempt to stop in its tracks the talk in Washington about the need for infrastructure projects, particularly those designed to fix crumbling roads and bridges.
A former congressman from Michigan, Stockman makes the case that transportation system statistics are presented in a skewed manner by government officials, with help from a team of road industry lobbyists.

As Michiganians prepare to vote on an increase in the sales tax to 7 percent for roads, a key factor to consider is that Gov. Rick Snyder and his transportation team are unable to target those funds solely to priority areas where busily traveled roads and bridges present safety and commerce concerns (more on that later).

Stockman recalled a story about his old boss, describing how President Reagan was “hoodwinked” into supporting a federal gas tax hike in 1982:

“During the long trauma of the 1981-1982 recession the Reagan administration had stoutly resisted the temptation to implement a Keynesian-style fiscal stimulus and jobs program -- notwithstanding an unemployment rate that peaked in double digits,” he wrote on his site, Contra Corner. “But within just a few months of the bottom, along came a Republican Secretary of Transportation, Drew Lewis, with a presidential briefing on the alleged disrepair of the nation’s highways and bridges. The briefing was accompanied by a Cabinet Room full of easels bearing pictures of dilapidated bridges and roads and a plan to dramatically increase highway spending and the gas tax.


Stockman

“Not surprisingly, DOT Secretary Lewis was a former governor and the top GOP fundraiser of the era. So the Cabinet Room was soon figuratively surrounded by a muscular coalition of road builders, construction machinery suppliers, asphalt and concrete vendors, governors, mayors and legislators and the AFL-CIO building trades department. And if that wasn’t enough, Lewis had also made deals to line up the highway safety and beautification lobby, bicycle enthusiasts and all the motley array of mass transit interest groups.

“They were all singing from the same crumbling infrastructure playbook. … ‘The Gipper’ soon joined the crowd. ‘No, we are opposed to wasteful borrow and spend,’ he (said). ‘That’s how we got into this mess. But these projects are different. Roads and bridges are a proper responsibility of government, and they have already been paid for by the gas tax.’

“By the time a pork-laden highway bill was rammed through a lame duck session of Congress in December 1982, Reagan too had bought on to the crumbling infrastructure gambit. Explaining why he signed the bill, the scourge of Big Government noted, ‘We have 23,000 bridges in need of replacement or rehabilitation; 40 percent of our bridges are over 40 years old.’”

But those numbers, according to the former White House numbers guru, were a sham.

A U.S. problem, or a Calif. problem?

Gov. Snyder, the Michigan road builders association and transportation officials across the state would certainly argue that Stockman’s remarks are irrelevant to the approaching road tax proposal on the May 5 statewide ballot.
No one would argue that Michigan’s roads and bridges remain in decent shape after two decades of neglect by the state Legislature. Our state clearly suffers from a large number of “structurally deficient” thoroughfares for motorists to navigate. But we come in at No. 17 among the 50 states in the percentage of our bridges that are defective -- not in the Top 5 or Top 10.

A few basic charts and graphs created by the American  Road and Transportation Builders Association, relying upon federal government data from 2013, puts things in perspective.
 

For example, an ARTBA ranking of the most heavily traveled structurally deficient bridges – meaning they are in need of repair or replacement – shows that Michigan’s most worrisome span comes in at No. 161. That designation is for a bridge at I-94 and Second Street in Detroit, which is a relatively young structure, built in 1971. Many of the bridges on the Top 250 list date back 60 years or more.
But here’s what jumps off the chart: 65 of the 75 busiest bridges at the top of the list are located in California, in the urban areas of southern California and San Francisco.

Stockman concludes that, at a time when an increase in the federal gas tax is under discussion by some Democrats on Capitol Hill, Washington should realize that heavily traveled, aging bridges are mostly a California problem, not a United States problem. He goes further by arguing that Gov. Jerry Brown created the Golden State’s transportation woes by spending huge sums to shore up financially wracked pension systems for government workers rather than tending to infrastructure.

An ARTBA map shows what’s really happening out there on America’s roadways. While California dominates the category of congested, dilapidated bridges, about one-third of the United States’ hazardous spans are located in six rural states in the nation’s mid-section: Iowa, Oklahoma, Missouri, Kansas, Nebraska and South Dakota.

Rural vs. urban

These states account for just 5.9 percent of the nation’s population and they have 118,000 bridges overall. That is, one bridge for every 160 people. To offer a parallel to that 160 figure (admittedly a bit of an apples-and-oranges comparison), the busiest bridge on the nation’s deficient list is a structure in Orange County, Calif., that carries 324,000 vehicles a day.
Among those six states with a bad bridge track record, the location with the most bridges is Iowa – nearly 25,000, or one for every 125 people. The fact that Iowa is the most important state during the presidential primary season, the nation’s capital of political pandering, makes me wonder if the infrastructure issue is presented in a misleading way because of the manner in which the Hawkeye State’s numbers can be manipulated.

Here’s where Stockman pours on the snark thicker than a tarry patch plopped into a pothole:

“…Suddenly the picture is crystal clear. These are not the kind of bridges that thousands of cars and heavy duty trucks pass over each day. No, they are mainly the kind Clint Eastwood needed a local farm-wife to locate (in the movie "The Bridges of Madison County") so he could take pictures for a National Geographic spread on covered bridges.
“Stated differently, the overwhelming bulk of the 600,000 so-called 'bridges' in America are so little used that they are more often crossed by dogs, cows, cats and tractors than they are by passenger (car) motorists.  They are essentially no different than local playgrounds and municipal parks. They have nothing to do with interstate commerce, GDP growth or national public infrastructure.”

Michigan tax plan flaw

Stockman’s heavily detailed blog post takes a look at the big picture regarding federal gas tax money, but it tacitly leads to a major flaw in the sales tax plan that was put on the Michigan ballot by the Legislature and has received outspoken support from the governor.
The $1.2 billion in revenue generated by the one penny tax sales tax hike (a 17 percent increase) and other provisions in Proposal 1 would not be fully prioritized. Essentially, the money flows into a fund created by a 64-year-old state law, Act 51, that spreads around the cash in a way that critics say disproportionately favors rural counties over urban and suburban cities.

Keeping the focus on bridges, as Stockman does – potholes are aggravating, but rickety bridges are scary – the vast majority of Michigan’s bridges in fair or poor condition are located in a few areas: southeast Michigan, Flint-Bay City-Saginaw and Grand Rapids. But those locations and others like them won’t receive most of the Proposal 1 transportation funds because the Act 51 funding formula does not place a great emphasis on vehicle traffic carried by roads and bridges in cities.

According to the state Transportation Asset Management Council, in the tri-county area Wayne County has about 60 bridges rated in poor condition; Oakland County has nearly 30; and Macomb, one of the smallest Michigan counties from a geographic standpoint, has more than 40.

In contrast, some northern Michigan counties have no bridges in poor condition.  Other rural locations that certainly would not be categorized as barren have few poor bridges: Kalkaska County, four; Alpena County, two; Charlevoix County, one.



Gov. Snyder is the tax plan's chief cheerleader

Obviously, none of those bridges carries even a small fraction of the daily traffic that passes over the structures in Metro Detroit, especially during rush hour. But Act 51 provides a majority of bridge money to state trunklines, and in many rural counties those state highways are the only thoroughfares that handle more than a minimal amount of vehicles and suffer subsequent wear and tear.

Funding formula bias

The rural bias built into the Act 51 distribution formula has generated countless debates in the Legislature without producing any reforms, though the law dates back to a time when Michigan’s suburbs were still farmland and many of the interstate highways were not yet built.
State Rep. Tony Forlini, a Republican from Macomb County’s Harrison Township, tried without success to secure an amendment to the road tax plan that would have tilted the new Proposal 1 revenue more towards heavily populated southeast Michigan.
Perhaps Act 51 can be revisited by the governor and lawmakers if Proposal 1 passes.

Stockman’s comprehensive blog brings mounds of transportation system data full circle by questioning why rural areas comprise such a large part of the nation's funding formula when they are such a small part of the nation’s population. One in five of Iowa’s 25,000 bridges are deficient, but with low traffic counts on most of those crumbling bridges, he asks, why is that a national issue? If one-fifth of Iowa’s bridges present a public safety hazard, why don’t Iowans take care of that problem?
What’s more, the 19,000 neglected bridges in the six states singled out by Stockman somehow equal the number of substandard bridges in 35 other states combined – including large states like Florida, Texas, New Jersey, Massachusetts and Michigan. Yet, these states have a combined population of 175 million, compared to 19 million in the six rural states, and more than 600 people per bridge, as opposed to 125 in Iowa. (In Massachusetts the figure is more than 10 times Iowa’s level -- 1,300 people per bridge.)

One salient fact – a nagging political reality – rises above any discussion on these matters. If the Michigan road tax formula was amended, if it was made fairer and most of the Proposal 1 money went to priority areas with busy but deficient bridges, the folks in places like Alpena and Charlevoix would ask a simple question: Why should they pay more taxes to finance bridge repairs in places like Genesee and Wayne counties?