Hello and welcome to Facts Matter, a podcast by the Citizens Research Council of Michigan. I'm Chad Livengood politics editor and columnist at the Detroit News. I'm here today with Eric Paul Dennis, research associate covering infrastructure at the Citizens Research Council. Nice to meet you, Eric.

Chad, great to meet you. Thank you so much for doing this.

I want to start, tell me a little bit about your background.

Yeah, I am a civil engineer by education and training. I spent several years of my career working as an engineer. I received my bachelor's degree in civil engineering from Michigan State University in 2006. After working as an engineer for a few years, I went back to school. I received a master's degree in environmental engineering from the University of Michigan, as well as a master's degree in urban planning from the University of Michigan.

So over my career, I've worked for County Road Commission, a couple of design build firms, a research and planning consultant that consulted extensively with the Michigan Department of Transportation. That was actually my most recent employment before coming to CRC. I've been with CRC for a little bit over three years now as our research associate of infrastructure policy.

Chad Livengood (01:24.686)
Okay, yeah, when I first saw your profile, was like civil engineer. That's not a normal background for people at the Citizens Research Council. But you just did a paper about the Michigan's road funding. Talk a little bit about kind of the top line findings in your research.

What we were trying to do was really take an objective, comprehensive view using as much pertinent available data as we could find to discuss where Michigan ranks in terms of road funding, not only compared to other states, but historically. Much of the data that we...

use has been used by others to make slightly different arguments, but we think that the way that we've brought together all sorts of different kinds of data across, depending on the analysis that we're doing, some of it uses a 10 year period of analysis, some of it uses 20 years. We think we've really provided a unique and objective

understanding of how Michigan's road funding has evolved over the last 20 years as well as our system conditions both historically and compared to other states.

So how does Michigan currently rank and maybe also just for context, how did Michigan rank 20 years ago or how's the pathway of Michigan's ranking in road funding? And I know you do a separate analysis right about pavement conditions.

Eric Paul Dennis (03:23.818)
In terms of road funding, we found that Michigan ranks 30th nationwide. This is a complex analysis. We break it down into, you know, if you take the data and try to understand what our funding is, say per lane mile of public road, there Michigan ranks 27th. If you take our funding data and try to understand how Michigan ranks per

population, their Michigan ranks 39th. And we've done this with a couple additional methods of normalization. We brought all of this together and determined that Michigan ranks 30th. And that ranking is pertinent to the decade of data from

2012 to 2021. So it's already a little bit out of date. Unfortunately, that is unavoidable. The data that I'm using comes from a combination of the Federal Highway Administration and US Census Bureau. And it just takes a few years for that data to be reported by the states to the federal agencies and then re-reported back out by the federal agencies. So the latest funding data that we have,

we've analyzed is as of 2021. So it is already a little bit out of date. We've also done a longitudinal time series analysis looking at Michigan's funding data from 2004 to 2024. So that's a little bit more up to date. So there we found that in that case, we can't compare this data to other states. It's a different data set. But as of 2024,

even adjusting for inflation rates, we are better funded than we have been at any time in the last 20 years.

Chad Livengood (05:23.788)
Yeah, but that does that take into account the bonding program of the governors?

It does. So yes, with the bonding, are much better funded than we were in 2024. But even without the bonding, are just our appropriated funding. still about 6 % above our funding levels in 2004 adjusted for inflation.

6 % above 2004. Okay, that seems like over 20 years, not a very large increase.

Correct.

Eric Paul Dennis (06:00.718)
It over 20 years, it's probably not a large increase. hit a so before 2015, which is when we've had our most recent legislation that put more funding into our system. The most previous increase in funding before that was in 2000 or in 1997, I believe. So between 1997 and 2015.

We had relatively flat nominal funding, which when you consider construction cost inflation and the way that we've adjusted for inflation caused our funding levels to slowly decline. So in 2004, and we adjusted the funding to 2003 inflation adjusted dollars. In 2004, our purchasing power of our road program was about 5 billion.

Uh, and that decreased to a low of 3.8 billion in 2016. After 2016, we started to get a lot more funding, both from our, uh, 2015 road program, federal funding increased. And so even without considering the bond funding, we are in 2024, we're at about $5.3 billion, which again is 6 % above that 5 billion in 2004. But that is, um,

near, I think about 80 % more than the low that we hit in 2016.

So a big part of your paper did focus on how funding is distributed. And I recently wrote a column about charter townships, at least a couple that have sort of taken this issue into their own hands and passed their own local road millages. There's only a handful of really big, large townships in the state that have these millages. So they have something.

Chad Livengood (08:01.614)
dedicated to roads because they're not part of Act 51, the formula. Talk a little bit about what you've kind of come to determine about Act 51 from your research.

Yeah. So act 51, you know, it was passed by our legislature in 1951. Uh, the law was originally only eight pages long. was a reasonably simple law. Um, it was actually intended as a funding mechanism for a time limited 15 year construction program. Uh, so it was initially scheduled to sunset in 1967 rather

then allowing the law to sunset and transitioning to a funding mechanism that would be more appropriate to maintain roads over time. The legislature continued to amend and tinker with this law. I think there's now been over 300 amendments. The law itself ranges over 100 pages if you were to actually print it out. And there's other aspects of

Michigan code that the law references that you would have to go to other parts of our legal code to actually understand how it fully works. It's become incredibly complex and it does have some very specific gaps, such as, as you mentioned, we now have these fairly large charter townships that essentially function as cities that are completely left out of this formula. Moreover,

The formula itself is based on metrics that could be measured back in 1951, such as straight miles of road, population in a jurisdiction, registered vehicles in a jurisdiction. None of those metrics have direct impact on how much it costs to construct or maintain a road. When we're looking at

Eric Paul Dennis (10:12.322)
what it actually costs to maintain a road. We're looking at things like traffic volume, especially truck traffic. Other factors that might come into play include the geology of the area. If you're building a road on a sub base that's wet clay, you have a lot more to deal with than if you're building on sand, things like that. Different regions of the state have different climate impacts that can impose costs. So our suggestion would be to think more

When we distribute our road revenue to different road agencies, think more about the costs that those road agencies are having to deal with rather than using these 74 year old proxy metrics that were probably about the best thing available in 1951, but are no longer the best way to assess how much it costs to construct and maintain a road.

Every time I talk to someone just kind of randomly like, huh, you know, family member or friend or something about road funding, they ask me about, well, how is it different from rural county to an urban county? And I always kind of bring up, I use the Telegraph Road example. Telegraph Road is a county road in Wayne and Oakland County. So it's totally on the county commissions and those

the two largest populous counties to maintain. It's six lanes wide. I think maybe even eight in some places, but it gets the same amount of money as a two-lane road in Huron County in the Thumb or Presqueal County or Baraga. And people are kind of surprised by that when they find out that that's, that was what most roads were.

right in 1951 were two-lane roads. Maybe even Telegraph was two lanes at the time. I'm not sure, but that's the inherent flaw in the formula, right?

Eric Paul Dennis (12:15.758)
It is, and it's a little bit more complicated than that because there's these population multipliers embedded in Act 51, but generally, not only do I think that urban county roads like Telegraph Road are underfunded in the distribution formula that we're using now, but I think we should

If we're really going to start from whole cloth and think about how we should be funding our road system, we should also be considering if it makes sense the way that we've divided jurisdictions. A road like Telegraph, I think that might make more sense as a state trunk line. On the other hand, there are some roads going through local

cities and villages that are state trunk lines that I think might make more sense for those cities and villages to have authority over. And in fact, a lot of cities and villages have been over the past couple of decades, taking on more and more of those state trunk lines. We have less state trunk line now than we have at at least any point within the last 20 years, because we've been slowly transferring those trunk lines.

within local jurisdictions to those local jurisdictions because they feel like they can better manage those systems. And I tend to agree to agree. So if we're really thinking about how we should be funding our road network and distributing funding, I think that this jurisdictional issue is part of the conversation that we should be having.

Okay. I mean, if we want to get townships pulled into this equation, what's that going to look like? Because one thing I know about from covering Lansing for a dozen years, if you start messing with something, you're going to try to include someone or take someone out. You're going to gore someone's ox along the way.

Chad Livengood (14:15.374)
And so if you tip what townships into the the into the funding formula does that mean less money for M.DOT? Does it mean less money for the rogue commissions, the cities, all of which have their own army of lobbyists and whatnot? And and supporters too. mean, and so how do you how do we how do we do this differently?

without, you know, touching the third rail or do we just have to touch the third?

I think we have to touch the third rail and I think we have to be very careful about it. I don't think that a appropriate fix is something that could be done very quickly. I think that it would be a extensive legislative and political effort. It would take a lot of conversations with these different agencies and interest groups. I think that we could avoid a

quite a bit of pushback if we can find some additional road funding that would increase our bottom line levels. So that would make sure that

there, nobody really comes out of this behind where they were before. if we can just hold harmless, every road agency in the state to make sure that they don't receive a drop in funding compared to what they're getting now, we can apply additional funding to where it really needs to go. So I think that having this conversation about additional road funding at this time is appropriate in part, because this would give us more freedom to.

Eric Paul Dennis (16:04.556)
reconfigure our distribution policy in a way that doesn't really scare road agencies and make them think that they would come out as big losers in a reconfiguration of the distribution formula.

Yeah, several years ago, I did the math where I added up all the money between the regular Act 51 money and the snow money that's appropriated to counties with just bigger, heavier, much deeper snow drifts than we get downstate. And it came out that Keweenaw County was close to $700 per vehicle.

And Macomb County was like $60 per vehicle. And a few others were just a little above that. But Macomb and Livingston were like really the bottom of the barrel. But to be fair, I mean, they do have a lot more days on the road with trucks and plows in Barraga or Key Wino or Houghton County than they do in Macomb. So, but then they don't have as many

six lane roads to maintain up in those parts. And so there is a, it seems like there's a balance of different needs that have to be sort of figured out because otherwise these rural places of the state are just going to be inaccessible at sometimes, sometimes of the year.

Yeah, I haven't looked deeply into the snow formula. I, it's only one per, I think 1 % of the MTF distribution or thereabouts. But there are, I think if you were to look into this, the snow formula, you would find some things that don't make a lot of sense. I think there's some historical aspects when they created the snow formula, they were basically basing it on

Eric Paul Dennis (18:06.486)
what happened in those previous five years and how much those counties tended to spend. Now that we have pretty good weather data, I think maybe we could actually distribute our snow formula based on how much snow an area gets and what they would be, the work that they would be expected to put in to take care of that. could, you know, we have day by day weather data now.

So we could distribute it based on need again, rather than assuming the need based on historical averages. So I think, you know, the snow, the snow formula is a minor part of our distribution system, but I think that is one area that could be rationalized.

Yeah. Are there any other aspects of this study that people ought to know or policymakers ought to be thinking about as they sort of try to tackle this issue?

So what we were really trying to hit on, and this wasn't an initial hypothesis when we started the research, but going through this research, seems that bottom line funding levels are a fairly minor contribution to the outcome of system quality in terms of pavement and bridge conditions. What you do with that money seems to be a lot more important and it's a very complex system.

When we talk about funding our roads, we often talk about how much money should go into the statewide formula. That's quite a bit different than when we talk about most other areas of policy. When we talk about like our state health policy or our corrections policy, things like that, education policy, we often talk about

Eric Paul Dennis (19:54.594)
possibly they need more money, but it's really important to think about how we're spending that money to get the results we expect. That conversation seems to often be missing in conversations about road funding. We assume that if you put a dollar into the statewide system, it's going to do so much good, but there are a lot of inefficiencies in the statewide system. And by addressing those inefficiencies, we think we could get more from the dollars that we're spending and dollars that we spend in the future.

regardless if it's, you know, $3 billion that the legislature is currently considering or less than that. I think we can be much more efficient in the system and get the results, get closer to the results that we want and have a more financially stable, yeah, financially sustainable system going forward.

Sure. mean, most projections show that once the bonding money runs out, pavement conditions for the state overall are going to start to slide again.

That is true. And that's one of another one of the things that we focus on is that these usually when we talk about road system conditions in Michigan, we're getting data from the transportation asset management council, which uses a metric called PACER. So not only do they report system conditions on the statewide federal aid eligible network using this PACER metric, but they report

pavement condition forecasts. And so we looked at the forecast that they've presented since 2011 and consistently every single one of those forecasts has forecasted a rate of pavement deterioration that was significantly above what they subsequently measured. And so I think that the data that we're getting from

Eric Paul Dennis (21:58.008)
TAMC should be really taken with a grain of salt. It's not exactly ground truth engineering quality data. They collect pacer data by basically driving down the road and writing down a number one through 10. But there are a lot of factors that determine how quickly a pavement will deteriorate that aren't considered in that system or those forecasts. And I think that might be part of the problem.

kind of confusing the conversations around road funding and condition when we don't have a clear view of what our system conditions actually look like, but we talk about it as though we do.

Yeah, I've pored over that PACER data for years and then tried to reconcile it with what you see on the roads. it's not always easy that the federal aid versus non-federal aid and try to explain that to some lawmaker or try to understand their district, you know, and that is one of the...

the difficulties. I sort of think though over years of covering this that people just notice the road they live on first as far as the condition of and a lot of that means local roads are and they generally are poor condition, but they're not built the same or not, you know, and they don't have nearly the same amount of traffic. So there's all kinds of conditions.

The other one out there is always heavy weight, heavy truck weights. And I think you all have studied that as well over time, haven't you, at times?

Eric Paul Dennis (23:52.066)
We have, there is some research from the Michigan State University. One of my former professors actually, Karim Chadi, has looked into what our, not only overweight trucks in Michigan, but generally costs imposed by trucks across the state. And in the research that he's done, I think that one of his findings can be

summarized as saying we just don't have enough data to really know how much damage these trucks are doing. So one of our suggestions is to perform what's called a highway cost allocation study, which the Federal Highway Administration and several other states have done, basically trying to understand the costs imposed to pavement by different vehicle classes. So this would go from

passenger vehicles, class one through light trucks, like a Ford F-350, that would be a class three. Commercial vehicles are class four and above. think class 12 would be a standard five axle semi. I think it goes up to, or no, that's class eight. And it goes up to class 12 for really heavy light gravel trains. And so we have ways of determining like when these trucks are traveling over our roads, how much pavement damage they're imposing.

and assigning costs to those vehicles. This is something Michigan's never done. And especially because we have these uniquely overweight truck laws in our state, I think this is something that would be valuable not only and not necessarily to restrict those trucks. I'm not arguing for that, but I think we should better understand the pavement damage they're imposing, the roads that they're imposing that damage onto and the

the road agencies that own those roads so that we can better distribute road funding based on need, that need is very largely based on truck traffic. We've done some analysis based on the data available, but I think that more analysis would be really helpful for the state to have us.

Chad Livengood (26:13.326)
Ab.solutely. People are always asking about that. I one thing I did know many years ago is that fewer than 6 % of the trucks are actually licensed to go above 80,000 pounds. 80,000 pounds is the standard across the country. And the irony is one of the heaviest trucks out there is the gravel train that you mentioned, and it's usually pulling aggregate or gravel to build roads.

There are some trade-offs who want new roads. They're gonna have to have the heavy trucks where I drive down them in order to get the material there to where it needs to go. So. Well, hey, I'm Chad Leibing, good with the Detroit News and I've been chatting with Eric Paul Dennis of the Citizens Research Council. Eric, thanks for taking time to talk about your study and the work you've been working

Absolutely my pleasure. Thank you so much for doing this, Chad.

Yeah, please give a like or follow to the Citizens Research Council on Facebook, Blue Sky, Instagram, Twitter, wherever you get your podcasts. You can find them online at crcmish.org or at crcmish. again, I'm Chad Leidenke with the Detroit News. You can follow me on various social media platforms or at detroitnews.com.

This is the Facts Matter podcast, a presentation of the Citizens Research Council.