Governance and Transit and Taxes, Oh, My.

Breakthrough nears on transit in southeast Michigan.  

That was the headline in a recent article in Bridge Magazine.  It is referring to the Regional Transit Authority of Southeast Michigan.  The concept of the RTA is to combine the transit systems of four counties (Oakland, Macomb, Wayne, Washtenaw) into a single authority. It has been just the latest effort to form a truly regional transit system for the metropolitan Detroit region. As this account from Curbed Detroit relates, the effort to achieve regional transit in Motor City has been frustrated over and over again. With the creation of the RTA, it was hoped that it might finally be achieved.  A carefully constructed plan (RMTP plan) was put forward in 2016, after many “listening tours” and much negotiation.  A millage proposal was placed on the November 2016 ballot.  It was not successful.

Now there is a last-ditch effort to save the RTA and the possibility of a true regional transit system for Detroit (the only major city without one).  But the factors that led to this latest failure, as well as many of the earlier ones, are still here.

Note: for all the illustrations of maps, a larger version may be viewed by clicking on the image.

Precinct-by-precinct vote for the RTA millage in November 2016


The RTA had gone through many birth pangs (for a blow-by-blow legislative account and other history, see our post, The SE Michigan Regional Transit Authority in Progress) before the package of bills was signed into law by Governor Snyder on December 19, 2012. SEMCOG, the SE Michigan regional planning agency, hosted the fledgling organization, supplying office space, support and a web presence.  The RTA Board consists of members appointed by the chief executive of each participating unit of government (in the case of Washtenaw County, which has no county executive, the Chair of the Board of Commissioners).  The Governor appoints the Chair, who is ex officio (non-voting).  Governor Snyder tapped Paul Hillegonds, a distinguished former state representative who has served in many public capacities as well as in industry.  He has led the Board through many travails.

The Board had some initial difficulties in settling on a Chief Executive Officer.  Then  they tapped Michael Ford, the CEO of the newly regional Ann Arbor Area Transportation Authority, who had had a notable success in the May 2014 vote to form the AAATA (as reported by the Ann Arbor Chronicle, over 70% of voters in Ann Arbor and the two Ypsilanti communities voted themselves a 0.7 mill tax to form the expanded authority).  With that background, he seemed the ideal person to lead the RTA through a successful regional millage vote.  The November 2016 request to taxpayers of Oakland, Wayne, Macomb, and Washtenaw Counties was to commit to a payment of 1.2 mills for 20 years to support the RTA plan. The millage failed, just barely.

The system map as proposed by the RTA in 2016

Since November 2016 the RTA board has been struggling to find a way to achieve success. The obvious approach is to try again with another millage, presumably after a few tweaks here and there. And the obvious moment is November 2018 (the legislation requires a November election date).

But it has been a rough ride, with several changes in leadership.  Michael Ford, with no electoral success to protect him, was terminated in March 2017 because of issues with his expenses.  His deputy, Tiffany Gunter, seemed to have things well in hand.   Under her leadership, a Board Retreat in May 2017 reviewed the possible issues and approaches (RTA Board Retreat) for the RTA to go forward in a forthright but optimistic manner. But in November 2017 Gunter quit.  According to this account in Crain’s Detroit Business, she had not been given a permanent slot and her salary had remained at the same level ($150,000) as when she was Ford’s deputy.  (Ford had been paid $200,000.)  The supervising planner had departed in May 2017 and now the transportation planner Lucas Reigstad also walked out.  Longtime transit supporter Megan Owens, on her Facebook page Support Detroit Transit (November 16, 2017), commented:

Today the RTA pretty much gave up and closed up shop. At today’s board meeting, the interim CEO resigned as did their staff planner, leaving 1 administrative staff person and some consultants. The board has no plans at this time to seek a new CEO. SMART has taken over their one project: RefleX. The RTA appears to have abdicated any leadership role, giving everything into the hands of the Big 4 (County Execs and Mayor Duggan) to decide if and when we get transit. The public, riders and other stakeholders appear to have no say.

Now a “leadership group” consisting of the elected county executives of three counties plus the Mayor of Detroit has been designated to figure out how to put this deal together.  Oh, yes, and also the Chair of the Board of Commissioners for Washtenaw County (Andy LaBarre) was invited to sit in.  (He is not mentioned by name and not pictured in this report by the Detroit News.)  But really, it is the Big 4 (Detroit Mayor Mike Duggan, Wayne County Executive Warren Evans, Oakland County Executive L. Brooks Patterson and Macomb County Executive Mark Hackel) who hold the fate of the RTA in their hands.  Unfortunately, the issues that nearly derailed the RTA before the last millage vote remain.

A Question of Governance

The comprehensive difficulty is the issue of governance.  As we explained some years ago,

(Governance) alludes to the manner in which government conducts its business and especially the way it interacts with its citizens.  Some of the important elements in this interaction are representation, taxation, and power.   People generally want to believe that they are fairly represented at the decision-making level.  If the body collects taxes, are they proportionate to the function of the governing body?  And does this body exert a level of power over daily lives that is appropriate to its function, not dictatorial or burdensome?

Governance is at the heart of any effort to create regional entities, especially in Michigan.  When you combine a number of essentially sovereign civic bodies (four counties and a major city), questions of representation and power immediately emerge.  These are very unlike entities.  Oakland County is the most populous and richest. In any relationship that involves taxation, they are likely to contribute the most.  Detroit is The City but also has a history of economic problems. Wayne County is the county that contains Detroit.  Macomb County is the workingman’s county with a history of being extremely independent on electoral issues (remember the Reagan Democrats?). And Washtenaw is the afterthought, a relatively rural county with a small urban area and some assets like the University of Michigan and the associated technology culture. (The original RTA proposal did not include Washtenaw.)  All have different things to gain or lose from a regional association.

The Citizens’ Research Council, a nonpartisan and well-respected organization that often analyzes governmental issues in Michigan, published a critical examination of regional authorities,  with the RTA as its example. It highlighted how uneven the representation is across the authority.

From the Citizen’s Research Council. Note the population and representation disparities. Larger percent of population indicates less representation.

There was some dispute about representation early on. As finally constituted, the RTA board consisted of two representatives appointed by each county (and one by the City of Detroit), plus a chair (non-voting) appointed by the Governor.   I say “each county” but in fact the power of appointment resides with the actual county executives and the Chair of the Board of Commissioners.

The question of how many representatives was solved by simply making everyone the same.  Except Detroit.  Notice that though this is after all a Detroit Metropolitan organization, the City of Detroit receives only one representative, the least well represented of all.


The representation is very uneven with regard to taxation as well.  Tax paid is determined by the ad-valorem of each county. (We explained some of this in the post, Taxes and the Local Government Quandary.)  Because Oakland County has a lot of valuable property, the tax yield both for the entire county and probably for individual taxpayers is quite high.  Note also that they have the highest total millage rate of all entities, meaning that their taxpayers are already paying a lot of taxes.

From the Citizens’ Research Council. Note the disparity in tax contributions. (The last column is total millage the citizens of each county are assessed, not the RTA millage.)

The answer to this inequitable (according to relative investment) arrangement was to make expenditures directly related to the funds contributed by each entity.  (For reference, Senate Bill 909 as adopted.)

An authority shall ensure that not less than 85% of the money raised in each member jurisdiction…is expended on the public transportation service routes located in that member jurisdiction.

Of course, this makes it almost impossible to have a truly regional effort.  The two Oakland County Board members, Chuck Moss and Timothy Soave, both of whom have solid financial and policy backgrounds, addressed a remarkable memo (Oakland RTA memo) to Ford and Gunter before the November vote.   Presumably some of their concerns were addressed, since they later acceded to the ballot issue.   But they note, “this 85% rule will require annual monitoring and different expenditure levels yearly as TV’s will always change, thereby causing the sum of the total proceeds to change.” Later in the 19-page memo, they complain that the mechanism to assure that RTA will stay with the 85% rule is vague and they also question the fairness of allocating the remaining 15% outside of the required set-aside.  Overall, the concern voiced here is that Oakland County will invest more in the RTA than the services provided will justify.  But the authors also question the ability of the RTA to administer the sums coming to them under the requirements placed on them, without harming the present local transit providers and systems.

Finally, the plan must establish a binding mechanism to guarantee that the benefits promised to each jurisdiction will be delivered, a mechanism that cannot be overturned by a simple majority vote of the RTA Board.

In other words, having two representatives on the board is not enough when one’s interests may be overwhelmed by the majority.  That is a power imbalance.

The CRC’s analysis concludes that representation by appointment in this fashion violates the “one man, one vote” norm for a body with the power to tax and cause many life rearrangements.  It posits that such a board should be elected by the population at large.  An example of this form would be the Ann Arbor Public Schools.  All voters of the district vote for the entire membership of the school board.  But it is not a coincidence that City of Ann Arbor concerns tend to dominate.  Most voters of the district live in the City.  In the case of Oakland County, their higher population numbers would likely give them at least slightly more weight on the RTA than they are being awarded.

Location, location, location

One obvious take-home from examining the results of the 2016 election is that the parts of the 4-county area that voted against the RTA millage were the areas not currently served by transit.   The parts where there were a high percentage of yes votes were the densely settled areas where people are using transit to get to work.

Job centers in the RTA area. From the RMTP.

Since fixed-route transit (bus routes) are usually installed only where the population density merits it, the transit web itself serves as a population indicator.

Existing transit services, from the RTMP. The single line between Washtenaw and Wayne Counties is the Air Ride.

In reviewing this, RTA staff suggested to the Board at their spring retreat that perhaps a circumscribed territory for the RTA, addressing only the urbanized areas where there were more yes votes, would be advisable in order to make a new millage more palatable.

Proposed limited territory, from RTA Board Retreat (only dark blue areas would be included in RTA).

This would, however, have two consequences.  One is that an increased millage rate (probably 1.5 mills) would be required.  It is assumed that the RMTP, which basically covered those areas, would remain intact. It also means that residents of those areas, many of whom are already paying millages for local services, would be asked to take on a considerable tax load for transit alone.  For example, Ann Arbor residents would add 1.5 mills to the current 2.7 mills, and thus a homeowner with a house valued at $200,000 would be paying $420 annually.  But considering that most Ann Arbor properties are now valued more highly, the more likely number is $630 (based on a market value of $300,000).

The Moss-Soave memo mentioned above makes a particular point about the possible impact on local transit millages, especially if the RTA does not deliver services seen to match its promises.  It asks what the RTA will do if local renewable millages fail because of taxpayer fatigue or disillusionment.

Maintenance of local services

One reason for urgency is that the RTA has no current source of funds. When the authorizing legislation was passed, it included a $250,000 appropriation, matched by $250,000 from MDOT.  In FY 2014-2015, the Legislature added a special appropriation of $1.1M.  Since then, they have obtained some planning grants and received some administrative charges for Federal funds.  They ended the fiscal year 2017 (September 30, 2017) with less than $1M.

They could dip into the government monies distributed to the current providers.  Detroit Department of Transportation (DDOT), Suburban Mobility Authority for Regional Transportation (SMART), and Ann Arbor Area Transportation Authority (AAATA) are now subordinate to the RTA for state and Federal funds.  Michigan state transportation tax (gas tax) is distributed to public transit providers via the Comprehensive Transportation Fund.  There are both operating subsidies and capital funds.  Federal funds from the Highway Trust Fund are also distributed to transit providers by a formula.  Because the RTA legislation allows 15% of these funds to be used by the RTA, the amounts distributed to local providers could be reduced by that amount.  Of course, doing so would likely harm the ability of those agencies to provide actual transit.  To my understanding, locally raised millages are exempt from this.  But clearly, unless the RTA can raise additional revenue on its own, it would not be helping the cause of public transit to hang on using those funds.

Disconcertingly, one of the options presented to the RTA board in its spring retreat was the idea of consolidation into one agency.

From the RTA Board retreat – an idea for consideration

On one hand, this is understandable.  A long-term complaint and a reason for establishing the RTA was that the suburban SMART system and DDOT have not coordinated well.  DDOT is a department of the City of Detroit and is supported by the Detroit General Fund.  SMART is supported by millages in various counties and communities (in something of a patchwork).  They really were two separate systems and their overlap has been a problem for the greater Detroit community.  But on the other hand, different communities have made decisions and commitments in support of these systems, and that is emphatically true of AAATA.  Talk about governance issues. Some communities have voted extra taxes for better service.  A consolidation does not recognize this.

Some obstacles to a changed RTA

Because this idea was the result of a closely argued process through the Michigan Legislature, any changes would have to pass through transportation committees of both houses and be passed and signed by the Governor in time to write up a new Plan and get the item on the November ballot.  It is still possible, but only if everything moves very, very fast.  Also, once you open up a piece of legislation, you don’t know what ideas people may have for changing other sections.  For example, what if the representation is altered, or the ways funds are distributed?

The impetus for the first pass was to provide a venue for the M-1 (now known as the QLine).  The Federal funding for that depended on the creation of a regional transit agency.  Now the QLine is built and operating.  Might the RTA structure be altered to give it better support?  (It is not currently part of the plan.)  So many possibilities.

The Big 2

If the news reports are correct, we’ll be hearing soon what the Big 4 have come up with.  The ever-hopeful Megan Owens asks supporters to put in a word.  Quotes sometimes appear.  But they are not always encouraging.  The problem is that the county executives of both Oakland and Macomb Counties are still reluctant though they are evidently willing to sit down at the table.  They were both unenthusiastic before the November 2016 vote but wound up taking no position.  These two (L. Brooks Patterson of Oakland County and Mark Hackel of Macomb County) are used to being the big power in their own turf, and are very territorial.  They might even like to have more power over the way the RTA is run.  So while Detroit and Wayne County are anxious to complete a plan, the Big 2 will not be rushed, even by the recent drive to entice Amazon to the area.  Hackel in particular has made remarks that indicate he is not supportive of the concept.  At one time, he mentioned roads and bridges, and recently he has been bringing up autonomous vehicles and the infrastructure to support them. (Macomb County has a strong involvement in that technology.)  He was heard on Michigan Radio as saying he wouldn’t support any plan that didn’t recognize that need.  The word on the wind was that we’d hear in January.  Here we are.

P.S. For those who missed the allusion in the title, Dorothy, the Tin Woodman, and the Scarecrow were tiptoeing through the Wood sharing their fear of Lions and Tigers and Bears (Oh, My).  But all they found was the Cowardly Lion.

ADDENDUM: Mary Morgan publishes columns irregularly via Medium.  The latest one is a transit update.  Sadly, she repeats the Bridge article without much more examination.

UPDATE: An interview with Paul Hillegonds by the Detroit News includes the suggestion that in the absence of a 2018 millage request, the RTA might look for income to survive until 2020.

“In the past, the state has supported us, but local bus services already are stretched,” he said. “The law requires us to stay in business, but if they don’t support the master plan in 2018, we will be running out of resources in 2019.”

Hillegonds mentions that one “Plan B” might be to look for the local bus services to support the RTA.  That would presumably mean, as we mentioned earlier, that they might tap into the regular operating budget for the local providers.

SECOND UPDATE: The Big 4 met on a stage with the Economic Club of Detroit (January 23, 2018) and left the RTA hanging once again.  As reported by Crain’s, the execs of Oakland and Macomb Counties are still not committing to any solution.  It now sounds as though they might be fishing to put some different features into the plan. Wayne County Executive Warren Evans said a decision was needed in the next 45 days if state legislative action is needed.

THIRD UPDATE:  Regarding automated vehicles, the University of Michigan is a leader in this field, including an automated shuttle already in use on campus.   The Federal Transit Administration is issuing an RFC for comments.

UM automated shuttle as shown on the FTA site.

FOURTH UPDATE: An interview with Paul Hillegonds and Robert Cramer (who runs SMART bus) at the January 29, 2018 TRU Transit Awards event is recorded in this podcast.   Hillegonds is cautiously negative about the notion of only Wayne and Washtenaw Counties joining to form an RTA (as was floated in this Bridge article).  He seemed to say that if Washtenaw got its commuter rail, there wouldn’t be money for anything else in the truncated RTA.  Also, he does not support any option that requires a change in the statute, which would mean action at the State level.  Instead, he stated that deputies of the County executives were working on a slightly amended plan that would maintain most of the current version.  One possibility is more cross-county routes.  The decision needs to be made by April or sooner to allow for work needed to put the item on the ballot.  He said that he hopes for a consensus on the Board.

FIFTH UPDATE: Oakland County executive Brooks Patterson sounds pretty definite in this February 7 article from the Free Press.

Only those communities that currently “opt in” with local property taxes to support SMART bus service should be included in a millage proposal to support regional mass transit, Patterson said.

Doesn’t sound like much of a consensus for a new millage proposal.

SIXTH UPDATE: Patterson really unwound in this February 7 interview with the Detroit News. Speaking of the current opt-out Oakland County communities, he said

“I will not betray them and slip some, or all of them, against their will, into a tax machine from which they can expect little or no return on their investment.”

SIXTH UPDATE:  Frustration with the Oakland County blockage has led some advocates to push the idea of a Wayne-Washtenaw RTA, presuming that the votes will be there since they were before. However, as we have noted, this would require state legislative action, and soon.  There are many difficulties with this scenario, but here is one enthusiastic scenario from a previous member of the RTA board. (Richard Murphy now works at the Michigan Municipal League.)

SEVENTH UPDATE: February 14, 2018 – looks as though the Board of Commissioners of Washtenaw County is ready to follow the dream. A BOC special meeting (on February 15) will have a discussion of a resolution in support for a Washtenaw-Wayne RTA.  According to a report by the Free Press, the hope of a commuter rail is probably driving this action.

EIGHTH UPDATE: The BOC did pass the resolution  (with three commissioners absent) on February 15. It instructs the County Administrator to “appropriately engage in discussions about a possible transit agreement between Washtenaw County, Wayne County, the City of Detroit, and other related public entities“.  The Administrator is requested to provide a report of options by June.

NINTH UPDATE: The Wayne County Executive, Warren Evans, has been pitching a revised four-county plan  (March 15, 2018) As noted by Curbed Detroit, it would call for a 1.5 mill tax.   But Macomb and Oakland County representatives are still showing notable resistance, according to Crain’s Detroit.

Explore posts in the same categories: politics, Regional, Transportation

6 Comments on “Governance and Transit and Taxes, Oh, My.”

  1. Robert Frank Says:

    Great research, Vivienne. Although I must say my head is spinning. I am most interested in how this bill would affect Washtenaw County. I remember that the previous RTA proposal had Washtenaw paying more taxes than benefits, compared to the other counties. It may be a good idea for the three counties, but paying on average $630 per year, and quickly rising, for occasional rides to Detroit is a poor use of tax dollars. There are already mass transit options to Detroit. The train, buses, and the Detroit Connector that U of M runs several times a day. And none of these are full.
    RTA will barely benefit Washtenaw County, and will put a large financial burden on too many Washtenaw residents. We already pay a fortune in taxes for AAATA, which is heavily subsidized.
    Part of the problem with a program like this is many of the proponents have something to gain from it being implemented. Such as Michael Ford who can’t get by on $200,000 a year plus great benefits, and have to resort to robbing the public and putting extra expense money into his own pocket.
    Like many of the other costly boondoggle projects being proposed, I hope common sense prevails.

    • varmentrout Says:

      Thanks. Yes, there is a great deal to say about Washtenaw County’s inclusion in this authority. If no solution is found for their current quandary, we should revisit that.

  2. Larry Krieg Says:

    Vivienne, excellent and thoughtful presentation, as usual. I intend to link from my blog and website to this.

    Of course, you and I often draw different conclusions from the facts, but I find little or nothing to take exception to here. Thanks for the presentation of facts!

    To clarify a couple of points you raised:

    First, consolidating all public transit into one regional entity is legally possible but functionally impossible under the provisions of the enabling legislation. You mention this was discussed in the retreat and shown as the final option in the bar graph you reproduced. The final bar in the chart – total acquisition – is attainable only if many conditions are met, laid out in Section 6(3)(b)(ii) of Michigan Public Act 387 of 2012. This includes unanimous support of the Board and total insulation of the RTA from any “legacy costs” of the agencies it wishes to acquire. At the time the Act was passed, the debt of the Detroit Department of Transportation was over half a billion dollars. While many financial changes have happened in the interim, it’s unlikely that DDOT or even SMART (which is better off financially) could meet all the criteria required by the law.

    Second, you are correct that the RTA is not given authority to tap into locally-raised transit funding. Section 7 of the above legislation gives the RTA real, but not total, authority to distribute funds, but only from state and federal sources. AAATA, DDOT, and SMART are required to submit budgets to the RTA for approval every year. In practice, the understanding on the RTA Board (based on my attendance at many RTA Board meetings and discussions with Washtenaw and other Board members) seems to have been that if a Board member votes to reduce funding to a local transit provider in their district, their tenure on the Board will be terminated by whomever appointed them before they reach the parking lot. This is why the RTA is starved for funding. If there were a real will for regional transit on the part of Southeast Michigan’s major governments, a 2% or 3% “processing fee” could be assessed on all state and federal funds passed through to local providers. This would be enough to keep the RTA functioning in its coordination and planning roles.

    But the RTA legislation as a whole was crafted to allow maximum control by county governments over the RTA. Yet the legislation did not provide enough assurance of total dominance by the two suburban “superpowers”. As a result of the memo from Oakland’s board members that you linked above, a watchdog committee was established just before approval of the millage vote. The revision to the RTA Bylaws at that time established this Financial Oversight Committee to be a Board within the Board and give veto power over everything to any one jurisdiction within the region. This is designed to make it maximally difficult to accomplish anything regionally, and make sure that power is firmly in the hands of the wealthiest.

    I’m afraid this isn’t the Cowardly Lion, Vivienne. But at least, this lion is firmly on the side of localism. Congratulations, Vivienne. the localists have won. This round, at least!

    • varmentrout Says:

      Thanks, Larry. I believe you are on the CAC for the RTA and have followed it closely. Thanks for clarifying some details – I did read about the legacy costs but I feared getting any more into the weeds on this – so many details.

      I’m not really against the RTA, though I think it was wrong to include Washtenaw County. A “clean” RTA without the many structural barriers it has would be a fine thing. We surely all want the major metropolis in our state to be healthy. But I don’t see this as a win – rather the next to final act in a Greek tragedy. The township system in Michigan has created this situation. The City of Detroit should have been able to expand to its natural boundaries.

      Most of all, I want our local regional system (AAATA) to be strong and successful, and I don’t want to see it harmed by the problems with the RTA. I hope Pittsfield decides to join at last.

  3. Jeff Hayner Says:

    Changing the voting boundaries from 4-county to Fixed Route Service Area to facilitate passage of an RTA millage is essentially gerrymandering. I thought that practice was antithetical to a democracy? Or is that only when it benefits your “opponent”?

    As for Mr. Kreig’s suggestion that the RTA skim 2-3% of the money destined for local use to prop up RTA staff salaries; if $150K/yr. wasn’t enough for Ms. Gunter to continue as a public servant after Michael Ford was run off for his willingness to squander taxpayer dollars, you can bet any attempt to re-fill that trough will be shot down at the State and Federal level.

    As Ms. Armentrout has shown once again by her comprehensive understanding/sharing of these matters eventually you run out of other people’s money.

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