Report suggests other ways to finance roads: tax or assess the increased value in surrounding property
The University of Minnesota’s Center for Transportation Studies released a study today that looks at alternate ways for governments to pay for freeway interchanges, highways or transit stations.
The basic idea: these new infrastructure improvements increase the value of surrounding private land, sometimes substantially, and governments could capture some of this new value to help pay for the improvements.
The Legislature commissioned the research in 2008.
A University release about the report says:
The study identified eight policies that can be classified as value-capture strategies: land value tax, tax increment financing, special assessments, transportation utility fees, development impact fees, negotiated exactions, joint development and air rights. Some value-capture strategies target property owners, while others target developers. The strategies differ in how, when and where they may be applied. They also give different outcomes, which can be assessed along four criteria: economic efficiency, equity, sustainability and feasibility.
Important legal considerations for units of government wishing to apply some or all of these policies were also considered. Statutory adjustments in Minnesota law would be needed to allow for implementation of several of the policies.
“The project provides new financing methods that are not currently considered or are not available under current Minnesota state statutes,” said David Levinson, the R.P. Braun/CTS Chair in Transportation Engineering at the University of Minnesota and one of the lead investigators of the study.
CTS will offer a series of educational workshops for elected officials and policymakers during the summer and fall of 2009 to explain the study results.
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Comments (2)
One drawback seems apparent. Just because a road runs by a property doesn't mean any cars will stop at that property to shop (or whatever), whether or not the government thinks its value is enhanced by the road.
Should, for instance, those who live along North Lexington Avenue pay higher property taxes because a lot of other people use that street to get to work or to a shopping center or restaurant?
The road industry's gravy train is coming to an end as their investments promoting automobile use no longer translate into increased gas consumption. So they are now looking for a new business model that will guarantee growing revenue for their industry in the 21st century. That has little to do with meeting transportation needs and everything to do with maintaining and increasing dependence on the automobile.
We aren't maintaining our existing roads, instead we are spending money on new capacity to encourage people to drive more. And not surprisingly, the more people drive the more traffic and congestion there is. That justifies building even more new roads.
It's not a coincidence that building new roads is a lot more profitable than maintaining the existing roads and extending their lives. That doesn't require engineers, or expensive heavy equipment from private contractors. It doesn't generate dues paying jobs for for the building trades unions. It doesn't provide opportunities for housing development miles from any job centers.
Most roads are designed to get people from here to there without much concern for what happens to the here, the there or the in between. The idea of charging the people who take on most of the burdens from auto-dependent development for the privilege is pretty outrageous. But then so is the idea that roads need a dedicated funding source instead of competing with all our other public needs for available tax dollars.
MnDOT has destroyed small towns and rural communities all over Minnesota. Lets not give them any more money to work with.