Subcommittee hears county, municipal officials warn of growing local road and bridge funding gaps

Chairwoman Steele convened the Appropriations Subcommittee on State and Local Transportation for a briefing focused on local road funding, where county and municipal representatives described growing needs on county and neighborhood streets and a looming federal compliance cost for bridges.

The County Road Association's Ed Noyola and Denise Donahue and the Michigan Municipal League's John LaMacchia told the committee that counties collectively are responsible for about 90,000 miles of road and that county agencies own roughly 5,868 bridges — about 52% of the state's total county- and local-owned bridges. "We have a federal mandate. It doesn't come with any money," Denise Donahue said, describing new national bridge-inventory data points and load-rating requirements the association must meet by 2027.

Why it matters: witnesses said the combination of increasing asset need, limited state-local revenue, and new federally required bridge load analyses creates both a near-term compliance cost and a long-term funding shortfall that will limit routine maintenance and replacements on local roads and bridges.

Noyola and Donahue outlined how local, state and federal sources now fund roads. They provided the association's estimates that county agencies maintain about 90,000 miles, municipalities about 22,000 miles and the Michigan Department of Transportation about 10,000 miles, which the presenters summarized as roughly 75%, 17% and 8% of lane-miles under each jurisdiction's control. Donahue said county bridges account for a majority share of locally owned structures and pointed to MDOT data showing about $1 billion in locally owned bridges classified as closed, critical, serious or weight-restricted.

The witnesses described recent grant rounds and program limits. Donahue said the 2027 call for bridge funding drew 401 applications requesting roughly $515 million while only about $80 million was available; counties were limited to three applications (the presenters said that limit is expected to fall to two in future rounds). She warned that federal funding and competitive application limits leave many projects unfunded.

The Michigan Municipal League's John LaMacchia emphasized that cities and villages manage a substantial local network and face different tools and constraints than county road agencies. He said about two-thirds of city-and-village roads are not eligible for federal aid and that cities and villages receive about $734 million from the Michigan Transportation Fund (MTF), with additional federal and local resources layered on top. LaMacchia proposed a targeted "neighborhood roads fund" and offered one possible revenue mechanism — a 50¢ retail delivery fee — which he said "would generate around $275,000,000 for neighborhood roads." He said the League's proposed fund would target non-federal-aid local streets and could be distributed by a formula if the Legislature chose to create the program.

Presenters also described pavement-condition differences and the pace of repairs. The County Road Association presented condition ratings showing federally eligible county roads at about 65% "good/fair" (target 90%), while non-federal local roads were about 44% good/fair (target 60%). Donahue said the County Road Investment Plan documented a $2.0 billion total need on the non-federal system and that local need rose by roughly $487 million from 2021 to 2023. Noyola said the system-wide goal would require improving roughly 13,000 miles per year; current funding supports about 6,800 miles annually.

On federally required bridge data and load-rating work, Donahue said Federal Highway rules add 54 new data elements to the National Bridge Inventory and require load-rating analyses for the full local bridge inventory by 2027. She said most counties lack on-staff bridge engineers and that the Michigan Department of Transportation's Bridges and Structures Bureau has estimated an initial statewide cost of about $22.5 million and approximately $21 million a year in follow-on costs for local agencies; she added that roughly 80% of those costs could be eligible for federal aid but that a state/local match would still be needed. "We need 22 and a half million," Noyola said when describing the upfront funding gap for the mandated bridge work.

Committee members asked whether federal funding streams were at risk; Noyola said he had spoken with the state's Federal Highway director and that "any project with federal aid is now moving forward as regular," but that special approvals from Washington could still slow projects with unusual environmental or other conditions.

Several members raised equity and affordability concerns when local jurisdictions rely on millages and special assessment districts (SADs). LaMacchia and Noyola noted that 91 cities and 23 villages reported dedicated road millages, but the amounts vary widely and many small communities cannot effectively fund road work via local property taxes. Noyola said county road commissions lack general taxing authority, which can force counties and townships to rely on voter-approved millages or special assessments to fund projects — measures that can be regressive or infeasible in low-tax-base communities.

What the testimony did not change: witnesses presented program-level estimates and policy options but did not propose a specific bill to the subcommittee in this hearing. They asked the Legislature to consider targeted funding approaches that recognize non-federal roads and the new federal bridge-data mandate.

Ending: The subcommittee took no formal action on a funding proposal in the hearing. Representative Borton moved to adopt the minutes of the Feb. 26 meeting; the clerk reported the motion "prevails by unanimous consent." The committee adjourned after the presentations and questions.