TRANSPORTATION FUND DISTRIBUTION - S.B. 1156: FLOOR ANALYSIS

Senate Bill 1156 (as reported by the Committee of the Whole)

Sponsor: Senator Philip E. Hoffman

Committee: Appropriations

CONTENT

The bill would amend Public Act 51 of 1951 (which establishes the procedures by which transportation funds are distributed) to do the following:

-- Extend by one year (until September 30, 1999) the expiration date on the formulas used to distribute Michigan Transportation Fund dollars.

MCL 247.660 et al. -

FISCAL IMPACT

The formula by which Michigan Transportation Fund dollars are distributed is scheduled to expire on September 30, 1998. Under current law, if a new distribution formula is not enacted by the expiration date, only 80% of those revenues can be distributed. This will result in a 20% reduction to the Comprehensive Transportation Fund, State Trunkline Fund, Counties, and Cities and Villages in FY 1998-99. The remainder of these funds will revert to the Michigan Transportation Fund until a new distribution formula is enacted.

Because the FY 1998-99 appropriation has not yet been enacted into law, the fiscal impact of this potential reduction is indeterminate. However, based on FY 1997-98 appropriations, approximately $342.8 million in transportation funds will be held in escrow until a new formula is enacted. If they were not held in escrow, these funds would be distributed as follows:

State Trunkline Fund $126.2 million

Comprehensive Transportation Fund 53.5 million

Counties 104.7 million

Cities and Villages 58.4 million

This bill would extend, by one year, the date on which the current formulas used to distribute the transportation funds expire.

Date Completed: 6-2-98 - Fiscal Analyst: P. Alderfer

floor\sb1156 - Analysis available @ http://www.michiganlegislature.org

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.