From my limited experience, ripping up roads to save money is a sign of extreme desperation. Things must be bad indeed in parts of Michigan.
Most of Michigan is in the dumper right now. The Grand Rapids area has unemployment about at the national average, but the state is at something like 13% overall right now. A town not more than 30 minutes from me (Muskegon Heights) has an unemployment rate around 24% last I heard. They just halved their local police force too. In a town there they always have a crime problem, that's not good!
The road thing is one of the few moves we're making that I 100% agree with though. A coworker of mine just had his road go from paved to gravel and it doesn't bug him at all. It was gravel a few years ago, went paved for a while, and they they reverted back to gravel the driving conditions improved.
Michigan's known for bad roads, but I'm not sure people realize just how bad they get. Drive too fast down a country road and you might knock your ass out from bouncing around so much, and I drive a damned SUV!
I remember tooling down an interstate in Illinois about, oh, 6-7 years ago with my younger brother. A sign came up, "DIP IN ROAD!" so I put two hands on the wheel and got ready for it. It was a tiny bump by Michigan standards, we wouldn't even bother marking it. We have pot holes so big around here that you'll seriously fark up your car if you hit them doing 35 sometimes.
Hell, big ran came through this spring and US-31 near me washed out. 30 foot of road, gone, with a drop off multiple feet high. Just saw a lawsuit today over a section of road in Allegan county that washed out and killed somebody that drove into it. Yep, we got holes in the road big enough to kill you 'round here.