August 2, 2013 Kirk T. Steudle, Director Michigan Department of Transportation Mayors & Managers Forum: A Bumpy Road Customer Survey:

Trunkline Pavement Condition has Peaked

Conditions are Getting Worse

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Transportation Needs: $1.5 B/yr. Ideally, transportation funding supports needs of all transportation systems – Bottom Line…Not enough money to do it all – Some effort to prioritize must be done Decisions must be based on most cost effective options that have largest benefits – May mean doing something different – Can’t keep doing what we’ve always done and expect a better result

Prioritizing Investment 6 Reinvigorating the economy…creating jobs Preserving existing assets Moving people & goods effectively Highest priority for the state & transportation

Savings: $63 m per year over 5 years – Closed facilities – 15% of positions left vacant – Refinance debt – Electronic signature – Energy retrofits – Leveraging Partnerships – Many other cost-saving innovations MDOT Efficiencies

– Convert cents-per-gallon gas tax to % of wholesale price, plus 14₵ increase to 33₵ – Diesel parity, from 15₵ to 33₵ – Increase passenger registration fees 60% – Increase weight-based truck fees 25% – Direct revenue to the roads that are most used – Plus a local option countywide registration Other proposals also exist: a sales tax increase dedicated to transportation or eliminating loopholes in current tax law The Governor’s Proposal

Fiscal Year 2014 Budget $120 million to STF to match federal funds $115 million for Roads and Risks Reserve Fund in October, another $115 million in February – A total of $230 million to accelerate programmed preservation work Just a down payment on the $1.5 billion per year additional investment needed – $1.2 billion through statewide user fee increase – $300 million by enabling local-option fees

Community Impacts Biggest impact is lack of action on revenue package Community impacts subject to size of revenue package and local investment decisions 10

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