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Financial Forecast

Sources of Transportation Funding

State Act 51 of 1951 guides collection and distribution of fuel, vehicle registration fees and weight taxes in Michigan. Michigan's fuel tax is collected at the refinery and deposited into the Michigan Transportation Fund (MTF). Federal taxes are placed in the Highway Trust Fund. All States and the federal government earmark all or some portion of the tax for support of highways and mass transit improvements. MTF dollars are distributed to MDOT, county road commissions, cities and villages using a complex formula including population and mileage of public roads under each agency's jurisdiction. It should be noted that the county road commissions have the jurisdiction over township roads and share the maintenance and improvement responsibility with the townships. The State also has programs for transportation improvements in their Transportation Economic Development Fund with categories for urban counties, rural counties, for improvements to the commercial network and for economic development that adds new jobs in the state.

Michigan cities and villages provide additional funding for roadway maintenance and development. Typical sources at this level include a community's general fund, dedicated millages, the sale of general obligation bonds, contribution from private sources, other governments and other local communities, tax increment financing and special assessment districts.

County road commissions supplement their budgets through contributions from townships, private contributions, special assessment districts, DDA funds and maintenance agreements with MDOT for work on state trunklines within the county. The private sector has recently become an active participant, with financing typically paid by developers to construct access roads to their developments at a minimum and often other improvements that are needed as a result of their development.

At the federal level the current funding programs used for transportation were first implemented with the passage of ISTEA and later renewed in TEA21. These programs include the Surface Transportation Program (STP), providing funds for the urban, rural, safety, and enhancement programs for the County. There are also funds specifically for bridge repairs and rehabilitation as well as funds designated to relieve congestion and improve air quality.

Methodology

The Southeast Michigan Council of Governments projects the revenues for all road agencies in the seven county region. They complete the forecast using a variety of data sources and forecasting procedures. One source is the receipts and expenditures for road and street improvement that the state, county and local governments are required to report under ACT 51. SEMCOG also used the funding set by Congress in the annual appropriation legislation and lastly the historic data of funded improvements.

Two forecasts were developed because there are funds that are dedicated specifically to transit. The financial forecast that excludes the transit specific funds is shown in Table 6. The Transit forecast factors in the funds associated only with transit service and is shown in Table 7.

Using the SEMCOG forecast, the Washtenaw Area Transportation Study develops financial targets for each of its' member agencies using a series of factors which include the federal and state methodologies for specific fund allocation, ACT 51 reports, population, and historic expenditure data. These are only targets and the projects are selected based on value to the region. Some agencies use less than their target and some use more. The county forecast provided by the Southeast Michigan Council of Governments (SEMCOG) is used to insure the projects included in the long range plan remain within the fiscal budget.

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