Whitmer: Michigan to borrow $3.5B to rebuild highways, bridges in State of State

LANSING, Mich. (AP) -- Gov. Gretchen Whitmer announced Wednesday that Michigan will borrow $3.5 billion to rebuild the state's deteriorating highways and bridges over five years, calling it a responsible move after the Republican-led Legislature rejected her proposed fuel tax hike.

 The Democrat unveiled the bonding plan during her second annual State of the State speech to lawmakers. It will enable the state Department of Transportation to do about twice as much construction on I-, U.S.- and M-numbered routes as it can now, she said. The funds would not be used to repair local roads.

Reconstructing, rather than resurfacing, state roads in high-traffic areas with the greatest need and getting to the projects sooner will save about $365 million in the long term, Whitmer said, because construction costs will be higher as time drags on. Pavement will last 25 to 35 years instead of five to seven years, she said. She pointed to low interest rates and noted that state debt payments for old borrowing will drop significantly in coming years.

"I'm not going to wait anymore. I am going to move forward unilaterally and get to work moving some dirt," Whitmer told The Associated Press ahead of her address. "Dollars that are bonded will be going toward rebuilding long-term assets. So it's not for short fixes. This is for reconstruction."

The second-year governor, who campaigned on fixing the roads, said increasing gasoline and diesel taxes by 45 cents a gallon to raise a net $1.9 billion more annually was "Plan A" and would have solved Michigan's road-funding problem. But GOP legislators who rejected that idea never countered with a serious alternative, she said.

"Meanwhile, another year's gone by and our roads are getting worse. It's more expensive for motorists. It's harder to draw investment into Michigan," Whitmer said in the interview. "This is really a smart way to go about fixing the trunk lines and state roads in a way that doesn't require a tax vote, that doesn't require the Legislature, frankly, so we can get started because it's important we get started quickly."

The plan, dubbed "Rebuilding Michigan," is not a surprise. During her 2018 campaign, Whitmer said she would ask voters to pass a multibillion-dollar bond if she ran into legislative resistance to "user fees" such as higher gas taxes.

While her predecessor, Gov. Rick Snyder, opposed bonding for roadwork, former Govs. Jennifer Granholm and John Engler used the tactic in the 1990s and 2000s.

The State Transportation Commission can authorize the borrowing without voter approval, which it will do at a meeting Thursday. It also is expected to revise Michigan's five-year project list then. Whitmer cited Interstate 275 in Detroit as an example of a project that was being bid for resurfacing and will instead become a reconstruction job.

Under the commission's policy, Michigan's debt service on State Trunkline Fund bonds is limited to $300 million, or a quarter of the revenue collected annually from state fuel taxes and vehicle registration fees. The state can pay up to $182 million more annually toward debt initially and not exceed the cap. 

Also, payments on past borrowing -- $118 million this fiscal year -- will drop gradually and substantially, to $6 million by the 2027-28 budget year, according to the nonpartisan House Fiscal Agency.

The new bonding will not address local roads, unlike under her 2019 proposal, which would have pumped $1.4 billion more into state roads and an additional $400 million into local roads than under current law. 

Whitmer put the onus on the lawmakers to come forward with permanent road-funding options, saying her Plan B focuses on financing. Asked if she considered proposing a smaller gas tax hike after the 45-cent plan fell flat, Whitmer said she took seriously Republicans' public criticism, which she said jived with what was said in private meetings.

"There's not a real seriousness about raising the kind of revenue we really need to bend the curve on our infrastructure crisis," she said. "Perhaps I'm wrong. And if that's the case, fantastic. If the Legislature wants to move forward on some funding, I'm eager to sit down and have that conversation. I think it's ultimately what has to happen."
Also Wednesday, Whitmer planned to outline some education and health care initiatives in what was expected to be a shorter-than-normal speech. It was the start of a busy nine days in which she also will deliver Democrats' national response to President Donald Trump's State of the Union address and present her budget proposal.

Michigan GOP Chairman Laura Cox offered a rebuttal to the State of the State, saying:

"Tonight’s address is yet another reminder of Gretchen Whitmer's failed first year as governor, and even more of the same empty promises for the future. Instead of committing to work with Republicans to find commonsense solutions to Michigan’s problems, Governor Whitmer made it clear that she’ll go it alone without the legislature if they don’t agree with her tax and spend policies.

"From her support for impeachment and Medicare-for-all, and her unrealistic roads proposal that raises taxes on hardworking Michiganders – Whitmer has proved that she is no different than the same out-of-touch liberal Democrats determined to sabotage the American dream."