The price of good streets

Over 60% of our roads are in what is considered "poor" condition- a number that continues to grow with every car that drives down the street and every freeze-thaw cycle. However, in order to make our streets better, we have to pay for them to get better.

Don't I pay for streets already?

The answer is yes, sort of, but not really. To break it down further, it gets a little wonky but please bear with me. 

City streets are paid for currently in three different ways: out of the general fund, state gas tax tollars and grant funding. The grant funding usually equates to roughly $3.4 million. The state gas tax is about $3 million. The general fund, as of this year, drops to $0. Yes, 0 dollars and 0 cents. 

Now you might be saying, "Our roads are terrible, why would you stop using general fund dollars for roads?" That would be an incredibly good question, and a city staff person would start talking about "transformation" until you fall asleep. The truth is, even when we did use general fund money for streets it wasn't enough to get our streets in good condition, it was only enough to stave off gravel roads. In order to actually get our roads in good condition (roughly 70% good or fair roads) it will cost us about $22 million every year for the next 15 years. With the state and grant funding, we are up to $6.4 million and the cities general fund was only paying $5 million - meaning we still weren't even halfway to paying to make our streets good. So yes, you were sort of paying for streets but only to keep them from becoming gravel.

How could our city actually pay for our streets?

The above explanation was a long way of saying we need new revenue in order to actually get our streets in a condition we, as a city, find appropriate. So, how can a city such as Grand Rapids raise revenue to create good streets? We have really only two options: a millage or an income tax - both of which are not terribly good taxes for this problem and neither are entirely sustainable. 

Millage: A millage is just a property tax, and it's just a bad option all around since it only taxes people who live in the city for our roads, when we all know people from all over the region use them. It's an inefficient way of funding streets, especially for a regional city like Grand Rapids. 

The Income Tax: As a city we have a ceiling on how high we can raise the income tax and right now we are at that ceiling of 1.5%. However, in 2015 the city's income tax rate is scheduled to go down to 1.3%. This means that in 2015 we have the choice of letting the income tax rate go down to 1.3% or maintain the current tax rate at 1.5% and use that .2% solely for roads. This would raise about $10 million annually. This would bring us to $16.4 million out of that $22 million needed to bring our roads to good condition. 

And that's it. Those are our only real options for paying for our streets from the city's standpoint - and with those options we still can't fully fund our roads or get them to a good condition.

What about the State?

So, if we were to approve to maintain the 1.5% income tax and use those $10 million solely for streets we'd only need $6 million more to reach the $22 million mark and it just so happens that the state is looking at making adjustments to how they fund the streets. If the state comes up with a solution for road funding it would raise almost exactly that $6 million for a city of our size. This is why it is so important for our state to act on a road funding. Without the state's help we can only maintain the condition of our roads at their current rate (60% poor). 

Are there any other solutions?

Not really. Our State is really bad about allowing cities to take care of themselves. In fact, there are many ways our city could fund our streets in a more equitable way and would allow us to become a truly first class city. In Salt Lake City and Dallas (in two of the most conservative anti-tax states), they fund their streets and their public transportation (both with light rail systems and great bus systems) with a local sales tax. A similar county sales tax of 0.5% (so instead of 6% you'd pay 6.5% in Kent County) could generate over $30 million every year - enough to pay for our roads and build a great transit system and it would only cost an extra 50 cents on every $100 spent. This would also take a large burden off the residents in Grand Rapids because anyone who travels and buys things in our city would also be taxed. Many cities around the country do this and there has been no evidence of it reducing consumption of goods in the taxed area. 

Other cities are also looking at a Vehicle Miles Traveled (VMT) fee. This VMT would treat our streets like we treat our electricity and water - the more you use the more it costs. So if you only drive a mile a day, you would only be taxed for that mile you drive compared to the person driving 100 miles a day. This is probably the most equitable way of paying for our streets and, if paired with other road funding, would be one of the most affective in reducing congestion and pollution in our cities.

To name all the solutions would be hard to do because there are so many but they all require the state to allow cities to even ask about them. For sales tax, the state has to change the constitution to allow for a city even ask to raise its own tax. State enabled legislation is actually required for VMT and all other taxes the city might want to look at. So, in order for our city and many other cities in the state (Ann Arbor, Lansing and Traverse City are all in the same situation) to get out of our road funding mess, we need the state to allow cities to act independently and use State funding appropriately in our cities. 

Alright- how can I help?

In short, our roads need to be fixed but our cities need the state to act. What we need is for you to talk to your legislator (Brandon Dillon & Winnie Brinks) about why we need adequate funding for our roads and why we need our city to be able to act autonomously.