Lauren Gibbons of Bridge Michigan chats with Eric Paul Dennis, research analyst specializing in infrastructure policy. While Michigan is working to ‘fix the damn roads,’ with historic levels of state and federal road funding, this effort has been undermined by unprecedented inflation in the cost of construction. And road construction inflation is not uniform: using 2015 as a baseline year, cost increases range from 34 percent in the Upper Peninsula to 63 percent in the Detroit Metro region.

Michigan’s highway construction costs have increased 12 percent above expected historical rates, resulting in the purchasing power of Michigan’s road agencies dropping by over $700 million in 2023 alone.

Following the enactment of a 2015 road funding package to increase Michigan’s annual transportation revenue by an estimated $1.2 billion by 2021, subsequent gains in state and federal funding increased Michigan’s transportation budget from $3.7 billion in 2015 to $6.1 billion in 2023. Expenditures on road and bridge programs, specifically, increased from $2.9 billion in 2015 to $5.7 billion in 2023. In nominal dollars, this represents a healthy 99 percent increase over these eight years. But when adjusting for inflation, the purchasing power of this funding is much lower.

Michigan’s road agencies generally have significantly more funding than any time in the past. However, this funding is not going as far as would have been expected only a few years ago. Agencies remain challenged to utilize existing funding levels to catch up with historical maintenance backlogs and bring Michigan’s roads and bridges into a state of good repair.