Road Commission for Oakland County (RCOC) management is pleased that the state Legislature and Governor were able to enact a new Michigan road-funding package and note the impact will certainly be positive for roads in Oakland County.
The state Legislature passed the new road-funding package on Oct. 3 as a part of the state’s 2026 budget. The Governor signed the package into law on Oct. 13.
Since then, information has been trickling out of Lansing about what the package means. The Michigan House Fiscal Agency estimates that RCOC will see an increase of nearly $46 million in state road funding in 2026, or about a 35 percent increase in state road funding. This is estimated to grow to about $61 million in 2027.
“This will allow us to build on the progress we have made since the last road-funding package in 2015,” explained RCOC Managing Director Dennis Kolar. He added the Road Commission was at risk of seeing the progress that has been made since the 2015 package took effect in 2017 lost if the state had not provided a new infusion of funding.
“We were at a critical point, and the Legislature and Governor came through,” Kolar said. “We know it is never easy for the Legislature to increase revenue for any need, and we appreciate that the legislators were able to set aside partisan differences and come together to make this package happen.”
The package is expected to generate about $1.7 billion in new funding in 2026, growing to about $2 billion by 2030, according to the County Road Association of Michigan (CRA).
The package removes the 6 percent sales tax from gas and diesel in Michigan, which has long been a point of contention, since it is a tax on fuel, but none of the revenue went to roads. The sales tax will then be replaced with a 20-cent increase in gas and diesel tax, that will generate $1.1 billion annually for transportation.
The package will also eliminate the $600 million general fund contribution to transportation that was established in the 2015 package and replace those dollars by redirecting $688 million in corporate income tax revenues annually to transportation.
Finally, the package also applies a new 24 percent wholesale tax to marijuana, that is estimated to generate around $420 million per year that will be directed to roads.
And while RCOC has not yet put together a detailed plan of how it will spend the money, Kolar and Deputy Managing Director/County Highway Engineer Gary Piotrowicz indicate it will be directed towards items including:
- Culvert replacements;
- Resurfacing paved roads, especially those that are not eligible for federal funds;
- Intersection safety improvement projects;
- Some form of contribution to subdivision street repaving; and
- Replacing aging equipment.
“This is a big deal,” Kolar said. “In my 40-plus years at RCOC, this is only the third time the state has increased road funding. While it is not enough to address the total needs on Michigan’s roads, it will go a long way toward continuing to improve the road system. It will make the difference between our roads again sinking into deterioration or continuing to improve.”
Kolar added that the package is also good for the state’s economy. “This is money that will go directly into Michigan’s local economy, creating and preserving good-paying jobs that cannot be exported,” he observed.
