TRANSPORTATION

Summary:  FY 2008-09 Appropriations

HB 5808 Enacted as Public Act 275 of 2008

Analyst:  William E. Hamilton

FY 2008-09

FY 2008-09

FY 2008-09

FY 2008-09

Difference: 

Enacted From

FY 2007-08 YTD

FY 2007-08 YTD

Executive

House

Senate

Enacted

Amount

%

IDG/IDT

$0

$0

$0

$0

$0

$0

--

Federal

1,200,740,600

1,316,771,200

1,316,771,200

1,449,795,800

1,460,995,800

260,255,200

21.7

Local

42,850,000

40,950,000

40,950,000

71,624,200

71,624,200

28,774,200

67.2

Private

0

0

0

0

0

0

--

Restricted

2,116,605,000

2,066,744,300

2,066,784,300

2,072,577,200

2,079,609,200

(36,995,800)

(1.7)

GF/GP

0

0

0

0

0

 

--

Gross

$3,360,195,600

$3,424,465,500

$3,424,505,500

$3,593,997,200

$3,612,229,200

$252,033,600

7.5


FTEs

3,035.3

3,014.3

3,014.3

3,014.3

3,014.3

(21.0)

(0.7)

Overview

The transportation budget supports state and local highway programs, public transportation programs, aeronautics programs, and administration of the Michigan Department of Transportation (MDOT).  Approximately two-thirds of the budget is from constitutionally-restricted state revenue sources—primarily motor fuel taxes and vehicle registrations—which is credited to the Michigan Transportation Fund (MTF) for distribution to other state transportation funds and programs, and to local road agencies, in accordance with 1951 PA 51.  Approximately one-third of the budget is federal revenue.  There is no state GF/GP revenue in this budget.

The enacted budget is a continuation budget; with no new programs or revenue.  Line item changes primarily reflect economic adjustments and/or adjustment of estimated restricted or federal revenue.  The budget does include transportation capital outlay items: the $167.5 million Aeronautics Capital Outlay program, as well as $9.2 million in Capital Building and Facilities projects.  The inclusion of Capital Outlay in the transportation operating budget is consistent with the revised Executive Recommendation and the Target agreement and is the principal reason for the increase in gross appropriations over the current year.  [Without the Capital Outlay items, the increase in gross appropriations would have been only $64.3 million – a $116 million increase in federal revenue partially offset by a $49.8 million reduction in state restricted revenue.]

The Governor's veto ofSubsection 3 of boilerplate Section 306 reduced spending authority by $100,000 from the amount in the enrolled bill.

Major Budget Changes From FY 2007-08 YTD Appropriations

FY 2007-08 YTD

Change

From YTD

1.     Debt Service

Reflects anticipated debt service schedules. The reduction in the federal fund source reflects the fact that the final payment of $32.1 million on short-term federal grant anticipation (GARVEE) notes was made in 2008.

Gross

Federal

Restricted

$223,612,200

55,080,000

168,532,200

($31,608,600)

(32,296,700)

688,100

2.     Grants to Other State Departments  PARTIAL VETO

Includes MTF IDGs to Departments of State ($20.0 million) and Treasury ($7.1 million – $753,800 less than FY 2007-08) for cost of collecting MTF revenue. These amounts reflect the Governor's veto of Subsection 3 of boilerplate Section 306 which required the Department of Treasury to develop a cost allocation plan for motor fuel collection based on time and effort.  The veto reduced spending authority by $100,000 from the amount in the enrolled bill.

While the STF grant to Civil Service Commission increased by $2.3 million to reflect transfer of all human service functions, there is a related reduction in STF funding for human service functions in the Business Support appropriations unit.

Gross

Restricted

$47,239,800

47,239,800

$1,710,000

1,710,000

3.     Executive Direction – Unclassified Salaries

Executive proposed $70,600 (STF) increase to baseline to fund unclassified FTE position that is currently authorized but unfunded and unfilled.

FTEs

Gross

Restricted

6.0

$531,800

531,800

0.0

$70,600

70,600

4.     Business Support

The proposed budget reflects the transfer of human service functions from the department to the Civil Service Commission.  As noted above, funding needed to reimburse Civil Service would be reflected in IDG.  This appropriation unit also reflects a $1.3 million reduction in property management costs as a result of completion of work on the Van Wagoner Transportation building.

FTEs

Gross

Restricted

78.0

$21,028,600

21,028,600

(21.0)

($3,863,200)

(3,863,200)

5.     State Trunkline Maintenance

Reflects state trunkline lane miles added by new construction and jurisdictional transfers, and increased costs of equipment, material, and fuel.  Also reflects increase in programmed roadside cleanup cycles.

FTEs

Gross

Restricted

828.7

$278,607,700

278,607,700

4.0

$6,120,500

6,120,500

6.     State Trunkline Road and Bridge Construction

Appropriates $1.043 billion for capital construction/reconstruction program. Decrease in available state restricted revenue offset increase in estimated federal aid revenue.

Gross

Federal

Local

Restricted

$951,515,600

774,371,800

30,000,000

147,143,800

$91,542,500

118,049,100

0

(26,506,600)

7.     Local Federal Aid Road and Bridge Construction

Appropriates $309.6 million in federal funds based on estimated federal revenue and Act 51 directive that 25% of most federal aid program funds be made available to local road agencies.

Gross

Federal

$268,570,000

268,570,000

$41,022,000

41,022,000

8.     MTF Distribution to Local Road Agencies

Appropriates $931.6 million MTF ($598.1 million to county road commissions, $333.5 millionto cities/villages)based on MTF revenue estimates and Act 51 formula; final distribution will be based on actualMTF revenue, which may be more or less than appropriations.

Gross

Restricted

$970,967,800

970,967,800

($39,397,000)

(39,397,000)

9.     Transportation Economic Development (TEDF) Fund

Provides $42.3 million for statutory distribution per 1987 PA 231; increase in FY 2008-09 reflects the end of the current year target agreement to redirect $13.0 million drivers' license fee revenue from TEDF to General Fund.

Gross

Restricted

$29,174,300

29,174,300

$13,157.900

13,157,900  

10.   Bus Transit – Local Bus Operating Assistance

Includes $166.6 million from Comprehensive Transportation Fund (CTF) for state operating assistance to local public transit agencies, unchanged from prior FY 2007-08 and FY 2006-07.

Gross

Restricted

$166,624,000

166,624,000

$0

0

11.   Rail Passenger Service

Provides operating assistance for Port Huron/Chicago and Grand Rapids/Chicago rail service with restricted funds; federal revenue providescapital assistance.The enacted budget appropriates $12.7 million, adding $4.8 million in federal spending authority to recognize potential Federal Railroad Administration grant.

Gross

Federal

Restricted

$7,900,000

1,000,000

6,900,000

$4,800,000

4,800,000

0

12.   Bus Capital

Provides matching funds for Federal Transit Administration (FTA) grants to local transit agencies; line reflects reduction in anticipated Federal Transit Administration grants distributed through this budget and related CTF matching revenue.  [More FTA grants are now distributed directly to transit agencies and are not shown in state budget.]

Gross

Federal

Local

Restricted

$46,163,600

30,000,000

5,000,000

11,163,600

($5,360,600)

(3,600,000)

0

(1,760,600)

13.   AERO Capital Projects– NEW

Senate includes funding for FY 2008-09 Aeronautics Capital program.

(The Executive subsequently concurred in the inclusion of the capital program in this budget as did the Target agreement.)

Gross

Federal

Local

Restricted

$0

0

0

0

$167,491,700

133,024,600

30,674,200

3,792,900

14.   State/Local Capital Facilities Projects – NEW

The revised Executive recommendation proposed inclusion of other capital outlay projects (salt storage facilities,TransportationServiceCenter, Institutional and Agency road program, other facility projects) in the operating budget, and this item was part of the Target agreement.

Gross

Federal

Local

Restricted

$0

0

0

0

$9,132,000

0

0

9,132,000

15.   Employee Economics

Provides $1.8 million increase for salaries/wages, $2.0 million reduction related to health insurance, and $1.7 million increase for retirement contributions.  Projected workers compensation would decrease $82,000.

Gross

Federal

Restricted

N/A

N/A

N/A

$1,461,100

2,800

1,458,300




Major Boilerplate Changes From FY 2007-08

Sec. 207.  Privatization –MODIFIED

Provides for reports on privatization activities and defines privatize and privatization.

Enacted:  Adopts new language substantially similar to current year language.

Sec. 263.  Impact of New Legislation and Administrative Rules MODIFIED

Requires a report, byApril 1, 2008, on specific policy changes adopted to implement new public acts.  Prohibits the Department from adopting administrative rules that have a disproportionate impact on small business.

Enacted:  Adopts Target language substantially similar to current year language.

Sec. 265.  Additional Travel Restriction – NEW

Limits out-of-state travel for conferences/professional development.

Enacted:  Adopts Target language substantially similar to Senate language.

Sec. 266.  Public Website for Expenditures –NOT INCLUDED

Senate requires department to post expenditures/purpose on public website.

Not included in Enacted bill.

Sec. 306.  Use of Transportation Funds by Other State Agencies/Biennial Audit of Transportation Funds - PARTIAL VETO

Sets guidelines for use of transportation funds (grants) by other state agencies; requires report.  Provides for biennial audit of use of transportation funds by other state departments, due 9 months after state CAFR is issued. The Governor had vetoed subsection 3 which required the State Treasurer to identify actual cost of work performed by Michigan Department of Treasury for state-restricted transportation funds.

Sec. 370.  Transit Agency Charter Service – NOT INCLUDED

Directs Department to maintain a compliant process for violations of 49 CFR, Part 604 regarding use of public transit vehicles for charter service.

Not included in Enacted bill.

Sec. 383.  Report on Use of State AirfleetMODIFIED

Requires quarterly report on use of department-owned aircraft; restricts transport of local government employees, employees of institutions of higher education, and legislative employees; waives restrictions for law enforcement and homeland security.

Enacted:  Adopts new language substantially similar to current language, but does not include Subsection (2) from current law.

Sec. 384. Detroit River International Crossing (DRIC) MODIFIED

Enacted includes modified language:

Sec. 384. (1) The state transportation department is allowed to finish theDetroitRiver international crossing (DRIC) study provided that activity associated with finishing the DRIC study shall not bind the state in any way to construction. Certain preliminary activities which are necessary to prepare a proposal for a decision by the legislature are allowed as long as they do not bind the state.  Those activities include the following:

                (a) applications for permits and approvals.

                (b) preliminary design engineering work.

                (c) preliminary utility planning and relocation

                (d) preliminary financial and funding arrangements.

(2)  The department will report on a quarterly basis to both the house and senate appropriations committees on any expenditures relative to the process identified in subsection (1).

(3)  In addition, advanced property acquisitions that are hardship or opportunity purchases are allowed as long as they do not bind the state. The department will notify, in writing, both the house and senate appropriations committees within 30 days of any advanced property acquisition purchases.  The department can not enter into any binding commitment to construct the crossing until authorizing legislation is enacted into law.

Sec. 391.  Deputy Director for Public Transportation – NOT INCLUDED

Indicates legislative intent that department establish position for public transportation.

Not included in Enacted bill.

Sec. 393.  Best Practices for Public TransportationNEW

Directs department to support best practices.

Included in Enacted bill.

Sec. 394.  Revisit Act 51 Distribution Formula – NEW/MODIFIED

Indicates legislative intent that department study distribution formula.

Enacted adopts new/modified language.

Sec. 395.  County Road C-56 Jurisdiction – NEW

Indicates legislative intent that department assume jurisdiction of County Road C-56 between US-31 and I-75 inCharlevoix County.

Included in Enacted bill.

Sec. 396.  State Match for New Starts NOT INCLUDED

Indicates legislative intent that department fully match federal funds for approved new starts projects.

Not included in Enacted bill.

Sec. 397.  Ann Arbor/Detroit Commuter Rail Stations – NEW

Indicates legislative intent that department work with SEMCOG in locating future train stations along corridor.

Included in Enacted bill.

Sec. 401.  Federal Aid Distribution Report – MODIFIED

Requires Department to report to the Legislature on proposed distribution of federal funds; provides a 30-day window for legislative approval/disapproval.  Governor indicates provision requiring legislative approval (in current law) violates separation of powers doctrine of the Michigan Constitution and is thus unenforceable. 

Enacted bill adopts Executive proposed language.

Sec. 607.  I-75 Interchange Flint TownshipNEW

Indicates legislative intent that Department construct new interchange.

Included in Enacted bill.

Sec. 615.  Interchange M-48 and I75 inChippewaCountyRETAINS

Indicates legislative intent that Department construct full interchange.

Included in Enacted bill.

Sec. 616.  Traffic Light US-31 Bay Harbor (Emmet County) NOT INCLUDED

Indicates legislative intent that Department reimburse the city ofPetoskey for traffic signal.

Not included in Enacted bill.

Sec. 617.  I-75 Service Drive in Hazel ParkNEW

Indicates legislative intent that Department reconstruct service drive.

Included in Enacted bill.

Sec. 655.  Eaton Rapids SidewalkProgram – RETAINS

Indicates legislative intent that Department spend not less than $32,000 for sidewalk improvement project.

Included in Enacted bill.

Sec. 656.  M-49 Upgrade “Green Highway” –RETAINS

Indicates legislative intent that the Department upgrade M-49 inHillsdaleCounty to a “designated” truck route.

Included in Enacted bill.

Sec. 658.  Interchange at I-196 and Phoenix Road in South Haven – RETAINS

Indicates legislative intent that Department reconstruct interchange.

Included in Enacted bill.

Sec. 659.  Life Cycle Cost for Pavement Projects–RETAINS

Allows the use of historical/comparable data from states with similar climate, soil, and vehicular traffic.

Included in Enacted bill.

Sec. 707.  Local Bus Operating Assistance –NOT INCLUDED

Provides for distribution of grants (language already in Public Act 51 of 1951).

Not included in Enacted bill.

Sec. 714.  Local Transit Demand-Response Services –MODIFIED

Requires that Department, in cooperation with local transit agencies, work to ensure that demand-response services are provided throughoutMichigan; requires report due March 1 of each year.

Enacted bill does not include subsection (2) reporting requirement.

Sec. 721.  Guidelines for CTF Matching Federal Transit Funds –MODIFIED

Reduces CTF matching funds for projects not put under contract within specified term.

Enacted bill modifies to provide exemption for lack of matching funds.

Sec. 722.  Transportation to Work Match for Federal Funds RETAINS

Requires CTF funds in Transportation to Work line be used to match federal job access/reverse commute grants.

Included in Enacted bill.

Sec. 734.  Transit Agency Service Performance Measures –RETAINS

Directs MDOT to work to ensure that transit agencies meet certain service performance measures.

Included in Enacted bill.

Sec. 737.  Birmingham/Troy Passenger Facility –RETAINS

Legislative intent that Department proceed with construction of a Birmingham/Troy intermodal passenger facility.

Included in Enacted bill.

Sec. 740.  Review of CTF Fund BalancesRETAINS

Requires report on unencumbered CTF balance by March 1 of each year.

Included in Enacted bill.

Sec. 741. Ann Arbor and Northwest Michigan Railroad –RETAINS

Requires report on progress made to improve rail track to support passenger trains at 59 MPH.

Included in Enacted bill.

Sec. 742.  Transit Innovation Grant Program –NOT INCLUDED

Senate bill required transfer of unencumbered CTF balance to new fund/program for transit innovation grants.

Not Included in Enacted bill.

Sec. 805.  Aeronautics Debt Service –NOT INCLUDED

Designates SAF funds for debt service on CTF bonds issued for ASAP program.

Not included in Enacted bill.  (Language not needed.)

Sec. 901.  Aeronautics Capital Program –NEW

Permits department to contract for airport improvement projects on behalf of local airport owners; local match requirements.  (Same as Section 901 in Capital Outlay bill).

Included in Enacted bill per Target agreement.

Sec. 902.  Aeronautics Capital Program – Status Report –NEW

Provides reporting requirement.

Included in Enacted bill per Target agreement.

Sec. 903.  Capital Outlay Carry Forward –NEW

Provides of carry forward authority in accordance with the Management and Budget Act.

Included in Enacted bill per Target agreement.