Michigan road construction is funded by a patchwork of federal, state, and local taxpayer dollars, through Township contributions towards projects.
The primary source of funding for roads in Michigan, are raised through the federal fuel tax, state fuel tax, license, and registration fees. These funds are distributed utilizing the ACT 51 formula to the road commissions on a monthly basis. That formula is as follows; MDOT receives 39.1%, Road Commissions receive 39.1% and Cities and Villages receive 21.8%. Once funds are split by municipality, then the MTF Funds are distributed to each of the 83 county road commissions based upon mileage and population of their county. For instance, Oakland, Kent, Washtenaw, Genesee, etc., would receive more funding than smaller, less populated county road commissions such as Clinton, Montcalm, Gratiot, and Shiawassee County Road Commissions. To see our MTF revenues, please refer to our financial page under our revenues, our MTF will be listed.
Historically, Michiganders have underinvested in the maintenance and construction of roads and bridges. Between 1997 and 2015, there were no increases in state road funding, SCRC’s primary source of revenue. When coupled with impacts of the economic recession, road agencies across the state were forced to cut back services and many roads fell into even poorer condition.
The state legislature has started investing more dollars into the road system, but it is not enough. Roads will continue to deteriorate and become even more expensive to repair unless something changes.
The Shiawassee County Road Commission (SCRC) typically draws from four main funding sources to improve roads which are described in greater detail below. There are many more sources of funding available under limited circumstances. Certain types of funding can only be spent on specific projects, and unpredictable events (such as bad winters) can use up funding that could have been spent on summer road maintenance and construction.
SCRC’s largest source of revenue comes from the state, primarily from fuel taxes and vehicle registration fees. The revenue generated from fuel taxes and vehicle registration fees is placed into the Michigan Transportation Fund (MTF) and the funds are distributed by formula to the Michigan Department of Transportation (MDOT), counties/county road commissions, cities, and villages. SCRC received approximately $8.9 million in MTF funds in 2020.
Another source of funding is federal and state grants. SCRC must apply for grants with a certain project in mind. There are different grants for specific types of projects. Examples include bridge replacements, congestion mitigation, guardrail, and intersection safety.
While state and federal funds provide a large amount of SCRC’s revenue, these funds frequently go towards the improvement of primary roads, not local roads. The amount of state funding allocated towards local roads is often only enough to fund winter maintenance and other maintenance functions.
Local roads makeup 67% of SCRC’s road network (over 730 miles), including most subdivision roads. Understanding that there is simply not enough funding to improve the County’s local roads, SCRC has established a Local Road Matching Program. Annually, SCRC offers each township matching funds to promote partnership and encourage investment in local roads, but this program does come at a cost— less funding for the primary road system. Historically, townships have been SCRC’s biggest partner in improving our roads. Townships typically invest $2-3 million annually in our road network.
The Michigan Department of Transportation (MDOT) hires the Shiawassee County Road Commission to maintain state highways within the county. State highways are routes designated with an I, M, or a US, such as I-69 and M-21. MDOT reimburses the SCRC for the cost of maintenance on these routes.
Many residents believe that their property taxes fund a majority of road work, but that is not true. The property tax you pay is primarily used for local and county governmental units and schools. The majority of SCRC’s budget is funded by the State of Michigan via the Michigan Transportation Fund (MTF), which includes revenue from gas tax and vehicle registration fees. While some townships may have imposed small property taxes (millages) to improve roads, a majority of SCRC’s revenue comes from the MTF.