LANSING, Mich. — Bills sponsored by Sen. Michael D. MacDonald and Sen. Jim Runestad seeking to save local communities from increased road repair costs associated with the use of federal funding are on their way to the governor’s desk after being finalized by the state Senate on Tuesday.
“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.”
Senate Bill 465, sponsored by Runestad, would allow 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 bill, SB 466, would allow for the use of state funds to replace the federal dollars as outlined in SB 465.
“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.”
The Michigan Department of Transportation (MDOT) 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.