House Calls: Rep. Jeff Irwin Talks Funding (i.e. New Taxes) For Transportation

Representative Jeff Irwin, a Democrat, served for a decade as a Washtenaw County Commissioner. In January 2011, he began his first term in the Michigan House of Representatives. In his regular column, House Calls, A2Politico will pose a single question to Representative Irwin and he will answer it. The questions will focus on his work in Lansing and, of course, his efforts to bring the “progressive agenda” to state government that he told voters in Ann Arbor he intended to work on during his time in office.

A2Politico asks: How can the state of Michigan/Michigan communities fund operational costs associated with high-speed rail? Would you advocate for a new state tax, advocate to raise an existing tax (which one), or for communities served by the high-speed rail to pass “transportation” millages, such as the one in Ann Arbor that partially funds AATA?

Representative Jeff Irwin: Michigan is woefully behind the nation and the world in transport. Rather than having a balanced system with the flexibility and redundancy of multiple modes, Michigan is unfortunately the epicenter of the car-only experiment. That experiment has been a costly failure as the associated sprawl has stretched our road, sewer, school and public safety budgets to the max. Now, we have a chance to reverse that trend and place ourselves on track towards a more financially sustainable future. Of course, doing so will come with some costs that must be compared to the cost of alternative actions or no action at all.

Thankfully, Michigan has taken some steps to address these needs by applying for federal high-speed rail funds that were rejected by Florida. These funds could be used to acquire and improve the railway that parallels I-94. If successful, this could be an important first step in building a healthy and production transport infrastructure for Michigan. Many of the state’s major centers of population and employment are right along this corridor and the existing infrastructure makes building this system much less expensive than starting from scratch. The biggest problem, of course, is coming up with the annual funds required to operate frequent service.

Unfortunately, in Michigan we have not provided local governments with the best tools to address these types of costs. Other regions are very successful in supporting transit through regional sales or gas taxes. These regions, such as Salt Lake City, Denver or Pheonix, have all utilized sales or gas taxes and they have realized higher than expected ridership and great economic development around their rail systems. The Metro Detroit region should do the same. Sales or gas taxes are the leading ways to finance transportation operating costs and I am developing a bi-partisan coalition willing to open up these options for local governments and their citizens.

Without new laws, Michigan could still move forward with high-speed rail projects. Of course, these operating funds could come from the state government’s General Fund. While desirable, especially as a short-term plan, that option is a long-shot. Another opportunity would be to support service through a millage. If crafted appropriately, such that the benefits and the costs are reasonably aligned, I think that rail service would be a meaningful addition to Ann Arbor’s charm, utility and marketability.

There are many ways to measure this idea as a value proposition to Ann Arborites. I’ll offer just one: you fly out of Detroit Metro Airport on a weeklong trip once per year and you need to either park there or take public transport. If you use $10/day for parking and have to park for six nights, the cost of driving to Metro is $60 (I believe parking at Metro ranges from $8 to $15). For simplicity sake, let’s assume that the cost of a ticket and the cost of gas is equal. If you own a home worth $200,000 and you are asked to approve 1/2 mill of new taxes to support the operation of the train, you’ll pay $50/year in new taxes ($0.50/$1,000 in taxable value). Now, that seems like a good deal, especially considering that you’ll have that service available for other trips and that a half of a mill raises about $5M a year from just the City of Ann Arbor (quite a bit more than enough to cover our portion of operating costs).

Opening up the City of Detroit, Metro airport and more through a rail connection would be a boon to our city and I believe that the value of that service is likely to exceed the costs. A much more detailed analysis is required, but this sort of back-of-the-napkin look suggests that utilizing this existing infrastructure is a good idea and the state decision to request federal money to help us along is a positive development.