Why Michigan’s Plan to Improve Its Infrastructure May Be the Pace Car for the Country

Michigan may be accomplishing something for its long-term development and economic competitiveness that this country has yet to do — meaningfully advance infrastructure.

Cherian George
Nov 29, 2018 · 7 min read
Detroit, Michigan

Michigan Infrastructure Council

Michigan seems to have laid the foundation through bi-partisan legislation earlier this year under Act 323. Almost all Democrats voting with the Republican state legislative house, senate majority and the Republican governor to approve a bold infrastructure governance plan. The executive body through which the state will act is the newly created Michigan Infrastructure Council. Promising structural features include:

UK Provides an Example

In the aforementioned Infrastructure Footrace article, I also referenced the United Kingdom’s National Infrastructure Council (UK NIC) which is the prototype for the Michigan Infrastructure Council. The UK NIC was set up to provide impartial, expert advice on the UK’s major long-term infrastructure challenges. In July 2018 it came out with its long-term strategic objectives.

Long-term strategic objectives

· €6 billion of new infrastructure needed each year for the next 30 years

Core medium-term proposals

· Nationwide full fiber broadband by 2033

Baby Steps in the US

There are no other examples of US states making such changes to effect better infrastructure governance. Interestingly enough, it was the state of Michigan that created a precursor to this infrastructure council with their Transportation Asset Management Council (TAMC) in 2002 to “provide a coordinated, unified effort by the various roadway agencies within the state”. It was charged with advising on a statewide asset management strategy and its implementation in a cost-effective and efficient manner. TAMC has now been placed under the aegis of the new infrastructure council, moving it from the Michigan department of transportation to the department of treasury. TAMC recently produced its own ambitious plan for managing and improving Michigan’s roadways and other transport assets. Historically Michigan and other US states lack adequate funding which has been the main barrier to improving the States’ infrastructure. The reaffirmation of the state’s commitment to infrastructure and governance structure under the treasury department may well be positive signs for better funding in the future.

Success in Michigan

While Michigan has taken some very positive steps, success will ultimately depend on its implementation, as in the UK:

Patience and Perseverance

It is also important to remember that meaningful changes to infrastructure do not happen in a year or two. Implementing strategies of this magnitude requires a multi-year agenda that extends over multiple political cycles and gubernatorial administrations. This means tabling the desire to make rash changes to the long-term strategy because they are not facilitating change quickly enough. Acting on that impulse will only result in more inefficient investment. Even the best long term strategies have their shortcomings. It’s the ability to work through them that make them successful.

Conclusion

If Michigan’s newly created infrastructure council can see its ‘forest through the trees vision all the way through, in spite of the pesky branches that will inevitably get in its way, the state’s water, transportation, power and telecommunications infrastructure could receive a real boost. If successful over time, this plan could very well turn out to be the blueprint that the rest of the country follows in meaningfully advancing US infrastructure.

Why? Forum

Commentary from Fitch on why we think what we think.

Cherian George

Written by

Cherian George is a managing director and head of the Americas in Fitch Ratings’ global infrastructure and project finance group. He is based in New York.

Why? Forum

Commentary from Fitch on why we think what we think.