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Coronavirus to hit Michigan’s road budget, could impact future projects

Posted at 4:20 AM, Jul 06, 2020
and last updated 2020-07-06 17:41:45-04
(WXYZ) —

Future construction projects in Michigan could be in jeopardy due to the coronavirus.

The Michigan Department of Transportation depended on two separate taxes to help fund road repairs. The first, a gas tax and the second tax comes in the form of new car registration fees.

Both have taken a hit because of people staying home during the lockdown. With the majority of people working from home, it means less people filling up at the pump and less people buying new cars and registering them.

“The pandemic is making a bad problem worse,” said Jeff Cranson, Director of Communications at MDOT.

Cranson says projects this year have already been budgeted for and are on track, it is future projects that give him concerns.

“The cash flow is such that we can sustain this year's program but in terms of money that would be left over to maybe go into next year's program, it will make a dent,” said Cranson.

An independent study from Moody’s Investor Service found revenue collection from these two taxes will be down 8.5 percent for 2020. There is a predicted five percent decrease for the following 2021 year as well.

Moody’s.analysis.june.2020 by WXYZ-TV Channel 7 Detroit on Scribd

Cranson says the lack in revenue could mean more patch work jobs and less long-term solutions.

“We have a whole bunch of old pavement that needs to be torn and and replaced, but we cannot afford to do it, so you know, we just keep patching and filling cracks, you know, limping along on,” said Cranson.

It was back in January that Governor Gretchen Whitmer proposed a $3.5 billion dollar bond plan to fix the roads. That plan was given a stamp of approval from the Michigan State Transportation Board.

Cranson says there are no plans to take that money away from the roads, stating it has already been allotted to certain projects.