State underfunded roads by nearly $4 billion

How are Michigan’s roads funded?

Michigan’s roads are primarily “user-funded.” Drivers pay gas taxes and vehicle registration fees, and that money is put in the Michigan Transportation Fund (MTF).

The three taxes we pay on gas in MI are a federal gas tax, a state gas tax and the 6% state sales tax - the federal tax goes to the state and is used to fund federal-aid roads, the state gas taxes go directly into the MTF, and the sales tax goes into the General Fund. Michigan is only one of five states that charges sales tax on gas purchases, meaning some of the tax paid on gasoline doesn’t go back into the roads.

According to a report on the state’s infrastructure released in Spring 2023, Michigan is facing a nearly $4 billion shortfall in annual funding to fix its roads and bridges. The report looked at the cost of maintaining Michigan’s roads, current road funding estimates and revenue sources, and the potential for raising more revenue to close the funding gap.  A previous 2016 report found that Michigan needed to invest an additional $2.2 billion to meet quality goals, but this newer report found that number continues to rise.

[Source: https://www.clickondetroit.com/news/michigan/2023/05/09/report-michigan-short-39b-in-annual-funding-to-fix-roads-bridges/]