2025 has marked a year of change for Michigan’s political landscape, as split government has slowed the pace of legislation, and has made it difficult to find consensus. Amidst these challenges for legislative leaders, one of the most consequential dilemmas they face this year is the future of our state’s infrastructure and how it will be funded going forward.
It’s no secret to Michigan’s drivers that our roads lag those of neighboring states. For small business owners who rely on our roadway infrastructure to connect them with customers and distributors, these shortcomings bring real consequences that show up on the balance sheet. Additionally, small businesses are substantial contributors to state government and rely on the state to ensure a safe, quality infrastructure system as one of its core functions.
In 2020, Governor Whitmer approved a $3.5 billion bonding initiative aimed at rebuilding some of the state’s most deteriorated trunkline roads. That initiative is now nearing its conclusion, which has served as the impetus for renewed discussion around permanent infrastructure funding.
As shown in this graph, Governor Whitmer’s “Rebuilding Michigan” bonding program largely met its short-term goals. In 2019, only 77% of Michigan’s trunkline roads were considered to be in good or fair condition, according to the Michigan Department of Transportation (MDOT). Today, that number has improved to 89%, thanks to increased, but temporary, investment. However, as bonding dollars expire and Michigan returns to baseline funding levels, progress is expected to erode. MDOT projects that just 55% of trunkline roads will remain in good or fair condition by 2029 if the legislature does not provide for further funding.
Since the bonding initiative was approved, the cost of building and maintaining roads has continued to climb. Inflation, rising material costs, and a strained labor market have all led to a steep increase in the cost of reconstruction, which now exceeds $5 million per plane mile, more than triple what it was just a decade ago. At the same time, Michigan’s existing road funding streams, particularly fuel taxes, have become less reliable as vehicles become more fuel-efficient and electric vehicles make up a growing share of the market.
As these conversations among lawmakers evolve, one thing is clear: substantial, sustainable funding is required to preserve and improve Michigan’s road network. As policymakers consider available options, small businesses have increasingly found themselves caught in the crosshairs. Proposals to raise revenue through broad-based tax hikes on employers continue to surface, even as small businesses already grapple with record cost increases and sustained labor force shortages.
To ensure small businesses have a seat at the table for this critical debate, SBAM formed a Roadway Infrastructure Task Force. The group, composed of small business owners from across the state, met over the course of several months to discuss how Michigan’s infrastructure impacts business operations and to evaluate the shortcomings of the current funding system. Through these discussions, the group worked to refine SBAM’s public policy positions on roadway infrastructure funding. The group’s findings are as follows:
Task Force Findings
- Invest in a Sustainable, Long-Term Funding Solution – Michigan must move away from short-term stopgap fixes and develop a funding system that can keep pace with road maintenance needs over time. Inconsistent, debt-driven solutions should be avoided, as they reduce the state’s capacity to complete projects, and incumber future budgets.
- Prioritize Maintenance – A key piece of any sustainable funding solution should factor in a regular maintenance schedule. Complete reconstruction is vastly more expensive than regular maintenance, so policymakers should align with proven techniques and best practices to ensure roads meet or exceed their expected life expectancy.
- Modernize User-Based Revenue – While some have proposed taxes on businesses to pay for road repairs, we believe that road users should pay for the roads. SBAM supports fair, transparent user-fee models, including mileage-based fees and other forward-looking strategies that do not disproportionately impact small businesses.
- Streamline Existing Revenue – Funds collected through fuel taxes and vehicle registration fees should be used exclusively for transportation infrastructure, not diverted elsewhere in the state budget.
- Ensure Uniformity in Fees – Small businesses require predictability. A patchwork of local and regional fees creates uncertainty and administrative burden. Michigan should aim for a standardized statewide approach.
Following the completion of its work, the task force submitted its recommendations to SBAM’s Board of Directors, which formally adopted the report as official policy in June 2025.
As Michigan continues the conversation on how to fund its roads, SBAM will remain an active voice in Lansing and will advocate for a balanced approach that strengthens our infrastructure while protecting small business from disproportionate financial burdens.
Read the full report here.
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