PA 51 of 1951
Michigan’s Transportation Funding Act
Thanks & Credit
House Fiscal Agency (HFA) Senior Analyst
William Hamilton
– Author of “Act 51 Primer, A Guide to 1951 Public Act 51 and
Michigan Transportation Funding”
“Act 51 Primer” available on internet:
http://www.house.mi.gov/hfa/PDFs/act51.pdf
Full Act available on internet:
http://www.michiganlegislature.org
What is PA 51 of 1951 (Act 51)
Governs appropriations for Michigan’s
transportation programs
Directs state restricted revenue:
– Motor Fuel Taxes (19-cent per gallon gas tax and 15-cent per
gallon diesel tax)
– Vehicle Registration Taxes
Why restricted
– Motor Fuel taxes and vehicle registration taxes are
constitutionally restricted to transportation purposes “after
payment of necessary collection expenses”
– Article IX, Section 9, Michigan Constitution of 1963
PA 51 “Funds”
Michigan Transportation Fund (MTF)
– The main collection and distribution fund for transportation
revenue.
State Trunkline Fund (STF)
– For construction/preservation of state trunkline roads, bridges,
and MDOT operations.
Comprehensive Transportation Fund (CTF)
– For public transportation agencies and operations (buses,
ferries, aeronautics, AMTRAK).
Local Road Agencies
– Local road/street programs for 83 county road commissions
and 533 cities and villages
Other PA 51 Items
Directs how STF and CTF funds are spent
– How much operating subsidy is available for transit agencies
Internal Formulas for local road agencies
– How much can we spend on major roads vs. local roads
Allocates federal highway funds between MDOT
and local road agencies
– Requires 75% of federal highway funds to be allocated to
MDOT and 25% to local road agencies
Reporting and compliance requirements for MDOT
and local road agencies
$3,000
$2,500
Federal
State Restricted
$2,000
$1,500
$1,000
$500
$2
,1
10
.3
0
$2
,1
19
.7
0
$2
,1
63
.5
0
$2
,1
40
.6
0
$2
,1
84
.1
0
$2
,2
25
.0
0
Millions of Dollars
$3,500
$9
85
.3
0
$4,000
$9
88
.0
0
$9
41
.8
0
$1
,1
32
.7
0
$1
,1
97
.6
0
$1
,1
69
.3
0
Historical Transportation Appropriation
Levels
$0
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07
Transportation Revenues (FY 06-07)
Transportation Budget (FY 06-07)
Transportation Share of State Budget
$3.4 Billion appropriated for state transportation
programs
Represents approximately 8% of the $42.4 billion
total state budget
There is no state General Fund (GF/GP) revenue in
the transportation budget
Michigan Transportation Fund (MTF)
Created in Section 10 of PA 51
90% of state generated transportation revenue is
first credited to the MTF
“Off the top” deductions
“Off the Top” Deductions
$3 million for Rail Grade Crossing program
$3 million for Local Bridge Fund debt service
$.03 of gas tax for MDOT, county road
commissions, cities and villages
(approx. $150 million)
½ cent of gas tax for state bridges
½ cent of gas tax for Local Bridge Fund
“Off the Top” Deductions (cont.)
$43 million for STF debt service
10% for CTF
$5 million for Local Bridge Fund
$36.775 million for Transportation Economic
Development Fund (TEDF)
$3.5 million for TEDF Category A grants (targeted
industries)
$33 million for Local Program Fund (64.2% to
counties; 35.8% to cities/villages)
“Off the Top Deductions”
Funds to cover the “Cost of Collection” for gas tax,
diesel tax, vehicle registrations, etc
• Up to $20 million for Secretary of State
• Unlimited amount for Department of Treasury
» $7.25 million for FY ‘08
• Unlimited amount for Department of Environmental Quality
» $1.24 million for FY ‘08
• Unlimited amount for Legislative Auditor General
» $204,000 for FY ’08
– AFTER ALL OF THAT: 39.1% to MDOT; 39.1% to
counties road commissions; 21.8% to cities/villages
State Transportation Fund (STF)
Supports MDOT administration, state trunklines,
and bridges
Covers 9,696 miles of roads—8% of total road miles
in Michigan
Carries 51% of traffic
Requires 90% of STF funds are expended on
preservation of the road system
Requires five-year warranties on state trunkline
construction projects when possible
Limits MDOT administrative expense to 10% of STF
funds received
County Road Commissions
Receive 39.1% of MTF balance (approximately
$600 million after deductions)
Divided among the 83 counties based on formula
(based on combination of miles owned, population, and amount vehicle
registrations)
Responsible for 88,961 miles of roads—74% of total
road miles in Michigan
Carries 31% of state’s traffic
Supports county primary roads and county local
roads
City & Village Roads
Receive 21.8% of MTF balance (after deductions—
approximately $350 million)
Divided among 533 cities/villages based on formula
(based on combination of population and road miles)
Cities and villages are responsible for 20,914 road
miles (17% of Michigan’s roads)
Carries 18% of traffic
Major Roads/Local Roads & Asset
Management
Two types of roads with our units: Major Roads and
Local Roads
Initial designations were made by cities with
approval by MDOT—in 1951
Streets may be moved from Major to Local by
council and approval of MDOT
75% of what you receive must be used on Major
Roads. You may transfer 50% of the Major Road
funds to the local system if you have adopted an
ASSET MANAGEMENT PROGRAM.
Asset Management
Was a recommendation of the Act 51 Transportation Funding
Study Committee
Involves the following components:
» Identification of performance goals—such as pavement
condition
» Inventory of assets—such as roads and bridges
» Recording measurable condition assessment—such as
pavement condition—in relation to goals
» Performance modeling—such as forecast of pavement
deterioration
» Analysis of alternatives—which is most cost effective to repair
or replace
A statewide system is being implemented for the federal-aid
eligible system
(entire state system and 23,000 of local roads)
Important to know because once city/village has adopted an
Asset Management system, you can transfer more
Major/Local funds between the two systems
Comprehensive Transportation Fund
(CTF)
Supports mass transit operations throughout the state (bus, train,
airport, ferry)
Allows 50% match for urban system operations (population of
100,000 +)
Allows 60% match for non-urban system operations (population of
less than 100,000)
10% must support intercity passenger/freight
$3.6 million support “specialized services” (elderly and disabled)
$8 million support Local Bus Capital matching support (used to
match federal grants). MDOT is required to pay 66 2/3% of nonfederal share
AFTER ALL OF THAT: the balance remaining, if greater than $50
million, shall go towards Local Bus Capital matching grants
Questions?
To contact Dave Worthams email dworthams@mml.org or call 517-908-0303