LANSING, Mich. — A bill package sponsored by Sen. Jim Runestad and Sen. Michael D. MacDonald to save local communities from increased road repair costs associated with the use of federal funding was signed into law Tuesday by Gov. Gretchen Whitmer.
“By giving our local transportation agencies more flexibility to cut their costs, we can help them fix more of our local roads and make a real difference in the lives of our hardworking taxpayers and families,” said Runestad, R-White Lake. “The nonpartisan Senate Fiscal Agency has estimated that these reforms could save local governments up to 30% each year in reduced compliance and overhead costs. Just imagine how many more miles of local roads could be fixed throughout our state with that amount of savings. It’s a game-changer.”
Senate Bill 465, now Public Act 49 of 2022, was introduced by Runestad and allows local road agencies to elect to participate in a federal aid swap with the state in an effort to reduce overall repair costs.
MacDonald’s SB 466, now PA 50 of 2022, permits for the use of state funds to replace the federal dollars as outlined in SB 465.
“Allowing local agencies to swap federal funds for state dollars — and avoid the burdensome requirements that come with the federal dollars — could help local communities save substantially on their costs and more effectively use their resources to improve local roads,” said MacDonald, R-Macomb Township. “State officials have much more experience dealing with the federal rules and are better equipped to meet the additional requirements at a minimal cost.”
The Michigan Department of Transportation estimates local road agencies see a cost increase of between 20% to 30% from meeting federal standards, such as bidding requirements and reporting.
Comparatively, MDOT estimates an increase of 10% to 15% in their cost to comply with federal requirements. This is because MDOT has an operation that is more suited to handle the administrative federal requirements than smaller municipalities, since the state department already receives 75% of those funds.
“Michigan county road agencies are greatly appreciative of the local federal aid buyout bills that recently passed the Michigan Legislature with immediate effect and more specifically, Sen. Runestad and Sen. MacDonald. They will bring significant efficiencies to local road agencies by allowing them to bid on projects locally without federal red tape and long delays,” said Denise Donohue, director of the County Road Association (CRA) of Michigan. “This is one of those pieces of legislation that is a win-win-win for every party involved, most notably the Michigan taxpayer.”
CRA Deputy Director and Legislative Liaison Ed Noyola added, “With these bills, Michigan joins 15 other states already using the buyout strategy. A rural county may have only one federal aid project every few years and is less likely to be staffed or experienced in federal aid projects, and may struggle with the red tape and detail work required to execute it.”