The Ups and Downs of Road Funding in Michigan
Few headlines are as pervasive as those criticizing Michigan’s road conditions. Funding gaps at the county and state levels are systemic and historic, leading to significant repair projects just to keep highways safe.
In this blog, we’ll take a look at Michigan’s newest road funding bill and how the state might be able to bridge the financial gap for safe roads.
How Are Michigan’s Road Repairs Funded?
The majority of Michigan’s road repairs are funded by state and federal money. These funds are primarily sourced through local or county mileages, taxes, fees and federal grants.
State funds for the Michigan Department of Transportation are provided by the Michigan Transportation Fund (MTF). The fund collects most sources of funding from within the state, including:
State fuel tax
Vehicle fees (including license plate and registration fees)
Money from marijuana taxes
Corporate income tax revenue
Counties, cities, and incorporated villages also raise funds for road repairs through property tax millages and, in some areas, special assessment districts (SADs).
The MTF distributes money based on formulas outlined in Public Act 51. The formula uses many factors, including population, roadway classifications, and other metrics.
Read more: The Basic Car Maintenance Checklist
The Lack of Road Funds in Michigan
By most measures, Michigan’s roads are underfunded after decades of budget shortfalls. Groups like the Michigan Infrastructure & Transportation Association (MITA) estimate Michigan’s road repairs face annual funding shortfalls measured in the billions, despite increases over the past few years.
Michigan Road Funding Chart
Michigan’s New Road Funding Plan
Signed in late 2025, Michigan’s new Neighborhood Roads Fund (NRF) will focus on funding local streets, while the MTF will get more fuel tax, marijuana tax, and corporate income tax revenue. The goal is to increase repair funding to over $1.8 billion by 2030, though some critics say the plan could be difficult to implement and that some cities may not be able get the funding they need from the NRF.
After decades of underfunding, the 2025 plan is progress, if imperfect.
For the Road Ahead
Garfield Auto is proud to help Northern Michigan drivers stay on the move, no matter the road conditions. We offer friendly, professional service at a fair price, keeping Traverse City families on the go. See what has made us Traverse City’s favorite repair shop for over 40 years.
Get in touch or call 231-929-3862 to schedule an appointment today!