Bill Eliminating Local Cost Sharing with MDOT Sent to the Governor

Posted on June 13, 2016 by John LaMacchia

Prior to the Legislature breaking for the summer the League was able to secure passage of a significant policy change to Michigan’s transportation funding formula.

Act 51 currently requires that all incorporated cities and villages with a population larger than 25,000 to pay a portion of the Michigan Department of Transportation’s project costs for opening, widening, and improving state trunkline highways within that incorporated city or village. A city or village is required to pay 12.5% of the project cost if their population is greater than 50,000, 11.25% of the project costs if their population is between 40,000 and 50,000, and 8.75% of the project costs if their population is between 25,000 and 40,000. This statute affects 45 cities in Michigan.

SB 557, sponsored by Senator Knollenberg, would eliminate the requirement for incorporated cities and villages greater than 25,000 to cover a portion of the Michigan Department of Transportation projects cost. As Michigan works to develop a 21st century transportation network the League believes these 45 cities should no longer be required to subsidize MDOT’s costs for the following reason:

  • All country road agencies and incorporated cities and villages with a population less than 25,000 are not required to pay a portion of MDOT’s project cost creating inequity in the system.
  • The funds used to pay for the cost of these projects comes directly from the 21.8% percent of funding received by cities and villages under Act 51. This results in less than 21.8% of Act 51 funding actually being used on local roads.
  • These matching funds can cost a local road agency a significant portion of their Act 51 funding.
  • Covering these project costs can delay, reduce, or eliminate future rehabilitation or reconstruction projects and significantly hinder a city’s ability to conduct routine maintenance such as snow plowing
  • MDOT’s planning process allocates state spending on projects based on the needs of their system without taking into account a city’s ability to contribute to the cost of those projects as required by Act 51. An unexpected bill from the Department could cripple a city’s local road program for years

This bill received unanimous support in both the House and Senate and is awaiting the Governor’s signature.

John LaMacchia is the Assistant Director of State Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at [email protected] or 517-908-0303.

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