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Economic Impact and Policy Analysis of Four Michigan Transportation Investment Proposals

The purpose of this report is to analyze the economic impact of four possible scenarios that would increase funding for roads in Michigan by $1.4 billion per year. We explore the need for more road funding and look at the implications of different policies that would raise the necessary funds. The need for more funding for Michigan’s roads is based on an analysis of past road conditions and what future conditions would be if funding for repairs does not increase.

We analyze the net economic impact of four different scenarios for raising an additional $1.4 billion per year for road repairs, accounting for both the costs and the benefits to Michigan taxpayers of the four funding scenarios.

Overall, we find that the quality of Michigan’s roads will decline rapidly if more funding is not raised for additional repairs and maintenance. All four scenarios for increasing road funding in Michigan by $1.4 billion per year result in an increase of 11,000 or more jobs in the state. Spending an additional $1.4 billion on roads creates almost 25,000 direct and indirect jobs created by sustained road construction and maintenance expenditures. The net impact also includes approximately 14,000 lost jobs due to increased motor fuel taxes and/or vehicle registration taxes. 

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