Budgeting and Appropriations | Annual budget; fiscal year begins October 1. The Legislature approves the transportation budget, but the budget is largely driven by how much revenue is generated and by statutory formulas for distribution. |
Bonding or Pay-as-You-Go | Combination of bonding and pay-as-you-go financing. |
State-Level Funding Provided for DOT Budgets | FY 2011 (approved): $1.97 billion |
Allocation of Federal Transportation Funds to the DOT | Federal transportation funds are included in the annual state budget. They must be appropriated before they can be spent by MDOT on state projects or made available for local projects. The Legislature approves a budget with line items at the category level, not for specific projects, and MDOT decides how to allocate funds within those categories. State law requires 25 percent of most federal aid programs to be set aside for local projects. |
Allocation of State Transportation Funds to the DOT | State transportation funds are distributed by statutory formula, but still must be appropriated in the annual state budget (at the program or category level) before they can be spent by MDOT or distributed to local agencies. |
Traditional State Funding and Finance for Highways | Fuel taxes; vehicle registration/license/title fees; tolls. Tolls support the toll facilities but not other transportation projects. |
State Funding and Finance for Other Modes | Transit, passenger and freight rail, and ports: Funded by a statutory share of fuel taxes, registration taxes and a share of the state sales tax on auto-related products-including on gasoline and diesel fuel-through the state's Comprehensive Transportation Fund. Aviation: Aviation fuel taxes; aircraft registration fees; airport parking tax. State trunkline bridges: Share of fuel taxes and registration taxes. |
Innovative Transportation Funding and Finance | GARVEE bonds (indirect only); Build America Bonds; state infrastructure bank (federally capitalized); design-build (reported in survey; no authorizing statute found); advance construction; toll credits or "soft match." |
Dedicated/Restricted State Funds and Revenues | The state constitution dedicates motor fuel taxes and vehicle registration taxes to transportation purposes; at least 90 percent must be used for roads, streets and bridges, and the balance for comprehensive transportation purposes as defined by law (Mich. Const. art. IX, §9). The Michigan Transportation Fund is the main collection and distribution fund for state transportation revenues, mainly from fuel and registration taxes. Revenues are credited to this fund, then distributed to other funds and programs by statutory formula (Mich. Comp. Laws Ann. §§247.660 et seq.). Recipients include the State Trunkline Fund for state highways and MDOT administration, the Transportation Economic Development Fund, the Comprehensive Transportation Fund-statutorily dedicated to public transportation-and local agencies. An auto-related sales tax also is deposited into the Comprehensive Transportation Fund (Mich. Comp. Laws Ann. §205.75). An earmark of certain driver's license fees is statutorily dedicated to transportation economic development (Mich. Comp. Laws Ann. §28.306). The State Aeronautics Fund is dedicated to aeronautics and funded by aviation fuel taxes, aircraft registration fees and an airport parking tax (Mich. Comp. Laws Ann. §259.34 and §259.35). |
DOT Authorized to Retain Surplus Funds | Yes. MDOT can carry forward appropriated funds for projects into subsequent years. Carry-forward funds do not need to be reappropriated. |
Legislative Approval Required to Move Funds Between Projects | No. MDOT must notify the Legislature before using bond funds for a different project than originally specified, but bond proceeds are not appropriated and no legislative approval is required. |
Transportation Funding Allocations through Local Aid | Local agencies-including 83 county road commissions and 533 counties and villages-control nearly 92 percent of the state's road miles, including many that are federal-aid eligible. Most state transportation revenue is distributed to local road agencies by statutory formula (Mich. Comp. Laws Ann. §247.660 and §247.663). State law also requires that an average of 25 percent of federal aid be set aside for local projects (Mich. Comp. Laws Ann. §247.660). There is little state oversight of these local agencies. |