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No they do not. The low responsive and responsible bidder gets the job. They cannot subjectively spread it out and make no attempt to do so. Two companies Dan's and Ajax pretty much get most of the work (at least recently). Why? They are consistently cheaper. Contracts are no awarded on who someone likes best or some idea of spreading out the work. It does not work that way, in fact there are laws to prevent that sort of subjective awarding.
Now days bids are pretty lean. Sometimes markups run as low as 4%. That means if the slightest thing goes wrong, the contractor may lose money on the job, and could even lose the entire company - even a big company. The days of healthy, mark ups in the 15% to 20% range are long gone. Now every once in a while, a contractor may figure out a clever way to stage a job and reduce construction time and thereby make a windfall profit, but it is pretty rare. Construction contracting is educated gambling and you must have some windfall jobs to even out the disasters. Otherwise all of them would go out of business. Eventually they can make a ton of moeny, but they have to take huge risks and often fail multiple times before they succeed. Even when they succeed, frequently a bad turn of luck wipes them out financially and they have to start over again.
They would be more profitable if they could choose what they want to pay workers (no prevailing wage law).
The gas tax increase is only a temporary solution to the problem. As MPG gets better and electric cars become more common, the gas tax revenues will begin to decline, yet the usage of the roads will continue to increase. Soon, probably within ten years, they will have to come up with a whole new system.
The politicians are afraid to vote for a gas tax increase. It will be very unpopular. Many of them got elected on an anti-tax platform. The pull to just continue the band aid approach to road repair will be very strong, but the past paind aid repaires are catching up with us. The current legislature is probably going to have to bite the bullet and kiss their political career goodbye and pass that tax. Otherwise the roads fall completely apart and they can kiss their political career goodbye. The only other option is to cut pet projects, welfare and retirement benefits and shift the money to roads, but that is political suicide as well.
I've heard that logic but I'm not buying it. MPG is not really getting better, as government standards haven't been increased since 1990. The new 2016 CAFE standards will probably be voted down in lame duck session.
Electric car sales have increased to .53% (not even 1%) of the total car market in the U.S, and it took 5 years just to get to that level. In the same time period, the suburbanization of the U.S. roared on even through the recession, so more people are driving greater distances, most likely more than making up for the gas saved with the increase in electric cars.
Even during the greatest recession in U.S. history, petroleum consumption stayed pretty level:
At least a gas tax is probably more recession proof than a sales tax increase. Retail sales in Michigan were gutted during the recession, and are just slowly now coming back to life. We need something more stable, in my opinion.
The reason is political. Michigan has not been able to afford repairs of the roads for decades. Rather than shifting money form other programs or increasing taxes or fees (both of which woudl be terribly unpopular) politicians have been putting band aids on the roads for about 50 years. Now it is catching up with us.
Michigan has raised the state gas tax several times during the past 50 years. The federal gas tax has also increased in the past 50 years.
Diverting gas tax money for other pork barrel projects like mass transit is one root cause.
Unlike States that have pass through traffic paying tolls (like Indiana and Ohio), we have to pay for the roads ourselves. Most of the gas tax goes to roads, but not the sales tax on gas. However with better mileage cars, hybrids, electrics and reduced travel due to high gas prices, less money is being generated to meet an increase need and expense. The gas tax is a fixed amount, rather than a percentage like sales tax, thus, when gas prices go up, road revenue actually goes down. Meanwhile the cost of materials and labor has gone through the roof. Unlike many states a large part of our road budge has to to to snow removal. UNtil recently, road moeny was distributed farily evenly. Thus, unused roads get as much attention as heavily used roads. As a result, many of our rural roads are in far better shape than our urban and suburban roads, especially up north.
Interstates in Ohio and Indiana do not have tolls, so your argument does not hold water. The tolls collected on the Ohio Turnpike can only be used for maintenance on the Ohio Turnpike.
Second, two companies usually get most of the major road work contracts. they are experienced, competent contractors. they have built thousands of miles of roads.
Tell me why the contractor which re-paved M14 between I-275 and Sheldon road in Plymouth several years ago screwed up and had to go back and re-pave it. The same section of road is now full of potholes.
Interstates in Ohio and Indiana do not have tolls, so your argument does not hold water. The tolls collected on the Ohio Turnpike can only be used for maintenance on the Ohio Turnpike.
However they maintain the Ohio turnpike - thus the State does not have to maintain it and then the tax dollars from gasoline purchases (and food) from the people passing through help pay for the maintenance of other roads. The pass through traffic is mostly on the turnpike. All those people passing through are paying for the turnpike maintenance and almost all of them are also contributing to the maintenance of other roads by buying gasoline as they pass through.
In Michigan however we pretty much have to pay for our roads all by ourselves. Virtually no one passes through Michigan and none of our freeways are paid for by tolls. We pick up a little bit of road income from tourism, but not a lot.
In addition Ohio gets 28 cents per gallon tax for roads. We get 19 cents. So not only are they getting more money for their road work, they are getting more people to help pay for it.
Indiana has a gas tax of only 18 cents, but they still have the benefit of a major toll road and huge amounts of pass through traffic. They have been maintaining their roads with lease royalties form the toll road but those funds are nearly all used up. They are looking for ways to increase revenue so their roads do not become like ours. (I do not know whether Ohio also gets royalties from the toll road operator, but it makes sense that they do.)
These are not arguments they are facts.
Last edited by Coldjensens; 05-16-2013 at 03:21 PM..
Tell me why the contractor which re-paved M14 between I-275 and Sheldon road in Plymouth several years ago screwed up and had to go back and re-pave it. The same section of road is now full of potholes.
Certainly no contractor, and no person can claim to have never made any mistakes. It happens. Sometimes there are bad contractors who do not know how to do the work and constantly make mistakes, but they do not get big jobs (they cannot get bonding for a big job) and they usually go out of business pretty quickly. As for your example, I do not know when that was or who was the contractor, so I cannot find that out for you. The reason it is now full of potholes may be several things. I cannot recall whether that stretch is asphalt or concrete (although I drive on it a couple of times a week usually), but the realistic life expectancy of asphalt averages around 11 years in our climate (it can last up to 18 years and it can wear out in 8-10 years). It may have just worn out. If it is concrete it should last a lifetime unless it was not designed well. However in all likelihood that was a band aid repair. That is exactly what I am explaining to you. The contractors build what the State, County, or other governing agency tells them to build. The government agencies have been designing the cheapest repairs possible. Those cheap repairs do not last long. Politicians need the road repair to last until the next election, so that is all they authorize expenditures on. It is called kicking the can down the road.
As to why the contractor may have had to come back and repave, it could be compaction failures, it could be readability issues (pavement is too wavy), it could be a bad batch of asphalt from the plant. However you example demonstrates exactly what I am explaining. The contractors must build to the government specifications. If the fail to meet the specifications, they have to come back and re-do it. the governments gets as an end product the construction they called for in their specifications. Think of it like a recipe for a cake. You have to follow the recipe. If the baker does not put eggs in, the baker must re-make the cake. However if you wanted a pie and provided a recipe for a cake, you cannot complain that the baker made you a cake.
the government tells the construction companies what they are to build, how they are to build it and what mix designs will be employed. Everything is tested and tested in different ways. If something gets put in that is not what they said to put in, the contractor must remove it and replace it.
There are other ways this can be done. Contractors can design roads and warranty them even for 20 years. Some states have done that. However you have to pay for a better design, and for the warranty. The state can also design roads that will last a ot longer. they know how, but it is expensive, so the design cheap repairs that do not last very long.
I've heard that logic but I'm not buying it. MPG is not really getting better, as government standards haven't been increased since 1990. The new 2016 CAFE standards will probably be voted down in lame duck session.
Electric car sales have increased to .53% (not even 1%) of the total car market in the U.S, and it took 5 years just to get to that level. In the same time period, the suburbanization of the U.S. roared on even through the recession, so more people are driving greater distances, most likely more than making up for the gas saved with the increase in electric cars.
Even during the greatest recession in U.S. history, petroleum consumption stayed pretty level:
At least a gas tax is probably more recession proof than a sales tax increase. Retail sales in Michigan were gutted during the recession, and are just slowly now coming back to life. We need something more stable, in my opinion.
You can argue the reasons all you want because no one can prove the cause, but it is not really deniable that gasoline usage has dropped off considerably in pretty much all states over the past six or seven years. In general the drop off is around 6% which is not a huge number, but it translates to a lot of moeny, especially when material costs and equipment costs have skyrocketed during that time. They did not have enough already and now they have to meet ever increasing costs with less and less moeny.
Petroleum products, which includes Styrofoam, plastics, kerosene, and lots of other things do not generate funding for road repair, only gasoline.
they looked at a tax on tires, or increasing registration fees, but it is difficult to raise enough money that way. They looked at ways to tax people based on miles driven, that would be the best answer, but it is not workable except on a national level and then you would need some sort of GPS tracking in all cars (massive invasion of privacy - not going to happen).
It is interesting how so many people are opposed to any increase in taxes or fees to fix roads, yet they propose no alternate solutions. You have $1 billion. Fixing the roads requires $2 billion. What you are going to do?
They are looking at two solutions or a combination of the two. Raise revenue (taxes or fees) or start closing roads (some can be converted back to gravel, but roads with decaying bridges that cannot be repaired will have to be closed).
There is one ray of hope on the horizon. New technology allows them to grind up old roads, mix the material with an emulsifier and lay it back down. It lasts nearly as long as new hot asphalt and costs half as much. Unfortunately right now, it only works in warm dry places. Maybe they will figure out how to make it work in cool, humid wet places eventually. that will certainly help.
However they maintain the Ohio turnpike - thus the State does not have to maintain it and then the tax dollars from gasoline purchases (and food) from the people passing through help pay for the maintenance of other roads. The pass through traffic is mostly on the turnpike. All those people passing through are paying for the turnpike maintenance and almost all of them are also contributing to the maintenance of other roads by buying gasoline as they pass through.
In Michigan however we pretty much have to pay for our roads all by ourselves. Virtually no one passes through Michigan and none of our freeways are paid for by tolls. We pick up a little bit of road income from tourism, but not a lot.
In addition Ohio gets 28 cents per gallon tax for roads. We get 19 cents. So not only are they getting more money for their road work, they are getting more people to help pay for it.
Indiana has a gas tax of only 18 cents, but they still have the benefit of a major toll road and huge amounts of pass through traffic. They have been maintaining their roads with lease royalties form the toll road but those funds are nearly all used up. They are looking for ways to increase revenue so their roads do not become like ours. (I do not know whether Ohio also gets royalties from the toll road operator, but it makes sense that they do.)
These are not arguments they are facts.
At least an increased gas tax would catch the people who drive through Michigan from Ohio, Indiana and Illinois (which there are a lot in the Summer).
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