Local government agencies across Michigan are receiving their first payments from a new nearly $2 billion annual road funding program that dedicates money to roads, bridges, and transit.
The Neighborhood Roads Fund, part of a long-term infrastructure plan, distributes money to counties, cities and villages to repair roads and bridges. The program also provides $100 million for local bridge repair and replacement, $100 million for public transit including bus operations and new projects, and $40 million for rail grade separation projects to improve safety and reduce traffic congestion.
The funding comes from a long-term road funding package that began on Jan. 1, 2026. The plan dedicates $1 billion per year from a sales tax and motor fuel tax swap that directs all taxes paid at the pump to roads without increasing costs for motorists. The package also dedicates $420 million annually from revenue generated by a tax on the marijuana industry, shifts $600 million from the individual income tax to the corporate income tax, and phases in an additional $440 million from corporate income tax growth.
According to Gov. Gretchen Whitmer's office, since the governor took office through the end of the 2026 construction season, Michigan has repaired more than 24,500 lane miles of road and 1,900 bridges, supporting more than 188,000 jobs in the construction industry.