Detroit Chamber's Mackinac Policy Conference 2015 Starts Today - You Won't Like The Outcome
Is that a donkey in front of the Grand Hotel?
Later today Michigan’s Self Very Important Persons start checking in at the Detroit Regional Chamber’s 2015 Mackinac Policy Conference held on Mackinac Island. At $ 2,150 per person for Chamber members and $ 2,925 for Chamber wannabees, average Michiganders will not be much in evidence. The attendees list reads like the last itemized contribution report for SafeRoadsYes!, along with the clueless Michigan politicians who endorsed Proposal 1.
The Detroit Regional Chamber’s “Vision and Pillars” for the 2015 Conference is innocuous enough, but the Conference’s agenda is far less oblique. A host of left luminaries and crony capitalists orbiting Michigan government will be plotting higher taxes, bigger spending, and more vexatious regulations. When they are not drinking.
The official agenda is all about Detroit, Michigan schools, alternative business subsidies, and the roads, but there is also the transformation of Detroit Water & Sewerage Department into the Great Lakes Water Authority lurking in the background. Roads are the most interesting part of the official 2015 Conference agenda, given the near universal support for Proposal 1 amongst the attendees. Despite touting ‘vision’, expect the Conference to endorse new taxes over improved efficiencies and better engineering.
Spectacular Death in Michigan No Bar to Success in Washington
While Michiganders were being entertained and infuriated by the lies of Proposal 1 proponents, few of us noticed that the very same roads funding strife is reaching a crescendo in Washington. The Federal Highway Trust Fund spends about $ 50 billion dollars on ‘transportation’ across the U.S.A. each year. Michigan received $ 1.39 billion from the HTF in Fiscal Year 2014 for new construction of roads and bridges, along with mass transit activities. As a point of reference, Michigan spent an additional $ 2 billion of funds raised within the state for the same ‘transportation’ purposes. The Federal HTF paid for 40.9% of Michigan ‘transportation’ spending in FY 2014.
Funded in the past by an $ 0.184 per gallon Federal gasoline tax ($ 0.244 per gallon on diesel fuel), the Highway Trust Fund’s traditional fuel tax revenues have fallen to about $ 34 billion. The Federal government has been supplementing the Highway Trust Fund from general deficit spending revenues since 2008. In Fiscal Year 2014, the Federal government supplemented the Highway Trust Fund with $ 11 billion in general revenues.
Kwame’s and Bobbie’s ‘Bridge of Bucks’ over Telegraph Road
Now that Michigan voters have mercilessly dispatched Proposal 1 to the garbage can of history, lets talk a bit about the philosophy of a truly effective plan to get Michigan’s roads and bridges up to par. This will provide a proper foundation for developing a ‘Plan B’ which will actually improve Michigan’s roads and bridges, and be acceptable to the population as well.
The underlying premise of Proposal 1 was that the only action required to fix up Michigan’s roads and bridges was injecting big money into the Michigan Transportation Fund. The depraved philosophy of modern American government. Not true and the voters knew it. But Michigan’s power elite believed that opposition could be neutralized by icing a pile of feces with chocolate frosting. Didn’t work despite a lavish $ 10 million effort.
The condition of Michigan’s roads and bridges has only a casual relationship with the funds available in the MTF. In 2014, 11% of MTF funds were siphoned off by various State of Michigan Departments in the form of charge backs for ‘services’ rendered to the MTF, as well as priority grants that have little to do with roads and bridges. Debt service is also a component of this 11%, but that is effectively a payment for previous time preferences of bureaucrats and politicians. Then 9.5% of the remainder was diverted to the Comprehensive Transportation Fund for mass transit. Finally, the MTF was partitioned amongst the State Trunkline Fund (36%), county road agencies (34.6%), and cities (19.8%). In each partition, further funds are siphoned off by charge backs, pension payments, and OPEBs. What’s left for the roads is more a function of politicians and bureaucrats preferences at every level than the amount of money front loaded into the MTF.
So how do we proceed? First develop a philosophy to frame and inform the ‘Plan B’ debate. After the fold.
Tomorrow morning the polls open for those who have yet to electorally weigh in on the largest tax increase that Michiganians have ever had the opportunity to give themselves.
We have chronicled the multiple failures of the package here in nearly 80 articles, specifically referencing the proposal itself and dozens of other articles leading up to it. Our efforts over the last five months have demonstrated that the overall issue in Michigan’s roads situation is one of complete dysfunction. In fact we’ve shown the proposal is hardly about roads alone, though that aspect is the only legitimate premise under which the proposal is being sold.
Aside from the convoluted language and constitutionally flawed (and with predictably BAD outcomes) package, it is a cacophony of noisy promises to Michigan’s recipients of taxpayer largess. Townships, schools, ‘the working poor’ and the road builders themselves all seem to have a dog in the fight if one was to buy into the governor’s hype.
It all comes at a cost, and it appears the taxpayers are wising up.