Road Commission for Oakland County Manager Dennis Kolar discusses Michigan road funding formula

This week, on the Talking Michigan Transportation podcast, Jeff talks with Dennis Kolar, managing director of the Road Commission of Oakland County, about his op/ed challenging the notion that a long-term fix for Michigan’s roads lies in changing the distribution of funds to the state’s 600-plus road agencies.

https://www.rcocweb.org/directory.aspx?EID=7

In the commentary, published in Crain’s Detroit Business Feb. 16, Kolar observed that the legislation outlining the allocation of road funds has been revised a number of times since the act was adopted in 1951 and none of the changes grow overall revenue.

https://www.crainsdetroit.com/other-voices/commentary-fixing-formula-road-funding-wont-fix-real-problem

https://www.michigan.gov/documents/act51simple_28749_7.pdf

An excerpt:

"In other words, our Legislature has always done a good job of updating the act when needed to address the ever-changing transportation world. This process has occurred through careful deliberation and a recognition of the many and varying transportation funding needs facing Michigan.

Unfortunately, most recently, there has been a knee-jerk reaction to our current funding crisis. Rather than providing truly adequate funding to address our transportation needs, some have instead proposed to change the Act 51 funding distribution formula so that population is the dominant factor."

Now lawmakers again are proposing changes in the distribution formula without any plan to increase revenues overall. This is despite the Transportation Asset Management Council forecast that nearly 50 percent of pavement in Michigan will be in poor condition by the year 2030.

https://www.whmi.com/news/article/mueller-bill-change-road-funding-formula

http://www.mcgi.state.mi.us/mitrp/tamcDashboards/reports/pavement/forecast

Transcript

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Narrator: It's time for Talking Michigan Transportation, a podcast devoted to the conversations with people at the forefront of the ongoing mobility revolution. In the state that put the world on wheels, here's your host, MDOT Communications Director Jeff Cranson.

Jeff Cranson: So, once again, welcome to the Talking Michigan Transportation podcast. This week I’m pleased to have with me Dennis Kolar, the managing director of the Road Commission of Oakland County. Dennis wrote what I thought was a very well stated op-ed in Crain’s last week that laid out why talking about the road funding formula in Michigan misses the larger point of what we need to do, and he underscored a number of good points, so Dennis thanks for taking the time to do this.

Dennis Kolar: You’re welcome, Jeff. Happy to do so.

Jeff Cranson: So, let’s start with your premise right out of the gate, when you said ‘here we go again,’ you made that point that this discussion about Act 51 has come up and gone on over time, and one of the things that you pointed out right away is that people like to say that Act 51 dates to 1951, which makes it sound archaic and in need of major overhaul, when in fact it has been revised dozens of times over the years.

Dennis Kolar: Well, that’s true and actually I think somebody has counted, and it’s been amended almost 300 times, and the formula has been changed, or at least the split, six or seven times, so as I pointed out in the article, I mean, through the years, some legislators and obviously the executive branch have gotten together and tried to modify and change things as the environment changes in Michigan.

Jeff Cranson: So, your history with this goes back how far? How long have you been in your position?

Dennis Kolar: Well, I’ve been at the road commission approaching 35 years, so and I have been in the managing director’s office for about 15.

Jeff Cranson: So, you’ve had a lot of time to try to educate the lawmakers and the public and media outlets about this problem, and why we’re where we are. What do you think really needs to happen to get a sustainable solution? There’s lots of reasons, I know we talk about term limits and things that make it difficult in Michigan, but compared to other states, why do you think we’ve been banging our heads against the wall for so long?

Dennis Kolar: Well, that’s, I guess that’s the million-dollar question, isn’t it Jeff? As far as the legislature through the years, has an executive branch that’s chosen to fund other things. I think you’re well aware that road funding per capita in Michigan has been toward the bottom 10 since the 60’s, and it’s professionals like us that need to get the word out, and maybe we need to do a little better job of trying to educate people, but it’s the legislators’ job to find the revenue.

Jeff Cranson: Yeah, so I was at a Chamber of Commerce breakfast in Grand Rapids this morning with a legislative panel, and Representative VanSingel who has some lakeshore communities in his district. He’s a republican, and he made the point that this is a revenue problem, and I think it’s his background as an accountant that kind of informed his remakes, but he said as long as you have people in any caucus that say I absolutely am not going to vote for any revenue, I’m not going to vote for any tax increase, I’m not going to vote for reinvestment basically, it’s going to be impossible to get something done. What do you hear from lawmakers in your delegation that you talk to?

Dennis Kolar: Well, I think they recognize that there needs to be an increase in revenue, the issue is where. In my opinion, there is a case to be made, and it seems like some would get behind taking the sales tax off of fuel and converting that to a gas tax. So, I think there is some movement on that, I don’t think it’s going to get to the point what the Governor’s proposal was last year at 45 cents, but I think there will be some movement, I just haven’t heard what yet.

Jeff Cranson: Do you think that, you know, because of the discussions and you’re keenly aware of this, that what MDOT is able to do with state trunkline fund bonds, bonding against those funds can only go to state trunklines, and doesn’t help the problem for your system or the other 615 local road agencies around the state. Is that going to spur some real discussion, or instead are people going to think well, the Governor must have solved the problem so we should move on.

Dennis Kolar: Well, I think you’re going to have people in both camps. I believe that yes, this will put some pressure on the local legislators to come up with something, you know, we talk about from the driveway to the highway, and, you know, without an increase in revenue, you know, in the next couple years we’re going to start seeing the road system fail again.

Jeff Cranson: Yeah, where do you feel like you are on the pavement projection curve for Oakland County, understanding that you also have to maintain a fair number of gravel roads?

Dennis Kolar: Well, the numbers and the modeling that we’ve done, shows that we’ll peak in 2025, you know, based on what I’ll call the “Snyder package,” and the addition funding we’ve received, we peak in 2025 with, I believe, about 51% good.

Jeff Cranson: That’s the peak.

Dennis Kolar: That’s the peak.

Jeff Cranson: Yeah, and what’s your goal when you think about good, fair, or poor pavement.

Dennis Kolar: Well, we would like to be up, you know, in the mid 80’s with our good and fair, for sure.

Jeff Cranson: So, Oakland county is –

Dennis Kolar: We’ll never get there.

Jeff Cranson: Right, right. That’s the problem. Yeah, and not to disparage anybody else, but Oakland County is among the best at asset management and I think much like the state, which has been very aggressive with the science of asset management for a long time, and in some ways can be victims of your own success by stretching the dollars, and, you know, finding new ways to innovate, and still get things done in a challenged funding environment, but you can only innovate so far, right?

Dennis Kolar: Well, that’s true. I think you make a very good point, you know, we've learned to be, and we try to be efficient all the time, you know, based on our revenue, and how bad it was before the last increase. We try to you know do the best with what we have.

Jeff Cranson: So, getting back to, you know, the premise, and the reason that you decided to write this op-ed, there's discussions again - this was going on even before the bonding plan was announced, but the bonding plan has certainly accelerated this discussion about redoing the formula so that the locals get more. You know, some people would have thought, well, you know, as head of one of the largest local road agencies in the state you would be all for that, because you'd be thinking, you know, how can I get more money for my county, but instead you took this more universal approach and said, you know, we've got to think once and for all about the entire state, you know, one Michigan. So, talk a little bit about that, and what provoked to write this.

Dennis Kolar: Well, what provoked me, I'm sure you're well aware, or those of us in the road businesses that had been this push with Sen. Lucido’s bills to really take a radical look and base the funding model primarily on population, and quite frankly, it would have gutted MDOT because MDOT wasn't going to get any of the revenue from population.

Jeff Cranson: Right.

Dennis Kolar: And, I mean, to me that was so radical that that's what generated writing that article, is like oh, wait a minute here, we're just rearranging the deck chairs on the Titanic, and you know, we're taking our eye off the ball and ignoring the real fact is that we don't generate enough revenue for roads in the state.

Jeff Cranson: Well, you laid it out succinctly and eloquently when you talked about the need for the agricultural products that your residents consume that may come from western Michigan and northern Michigan. In the same token, you talked about people going to the beaches and the other tourism spots, and I think that problems with things like Sen. Lucido’s bill are, you know, as I've said, it's like that works, I guess, if you're going to tell people in Macomb County they can only drive in Macomb County.

Dennis Kolar: Right. Well, and not to probably get too deep into those bills, but what that was generating, I don’t know how much you've read, some of that, Jeff, is they were talking about developing their own formulas, each county would develop their own funding formula.

Jeff Cranson: So that the communities within the county would have different distributions, basically.

Dennis Kolar: Correct, and to me that just seems complicate things far more than what Act 51 is.

Jeff Cranson: Yeah, we already think Act 51 is this Byzantine thing, and that every time you’d pull a thread, you know, the whole thing could unravel, and it's complicated enough, so adding to that seems really scary.

Dennis Kolar: Right.

Jeff Cranson: Yeah, I agree. Well, I guess, you know, going forward, you know, like you said, we're in this together, we're going to keep at it, you're going to keep at it. Some of the things I heard today from a pretty broad section of the west Michigan delegation, at least Muskegon, Ottawa, and Kent counties, is that desire to keep talking about it, and you know, that revenue has to be part of that whether it's increasing the sales tax, expanding that to more services. Just for a second, you know, if you could be king, because you've studied this, and you’ve looked at Act 51, what do you think, and you know, it doesn’t have to be what the governor proposed last year, but what would you see as the ideal solution?

Dennis Kolar: Well, my ideal solution would be something along the lines between registration fees and a fuel tax increase, and the reason I say that is because those two things are constitutionally protected, and future legislators can't change that.

Jeff Cranson: And that’s the big problem with what you called the “Snyder plan” earlier, right, that $600 million isn’t necessarily guaranteed.

Dennis Kolar: And that’s why I say that. Now, that might, you know, some people might get excited about that, but being in the road business, we want to make sure that the funding that comes here is dedicated to roads and is spent on roads.

Jeff Cranson: Yeah, absolutely. Well, Dennis, thanks again for taking the time to talk a little bit about this, and for, you know, for your voice, your important voice, given your constituency, and the importance of Oakland County in the entire state, state government, and roads, and everything else that matters, I really appreciate it.

Narrator: That’s a wrap for this edition of Talking Michigan Transportation. Check out show notes and more on Soundcloud or by subscribing on Apple podcast.

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