Transportation tops Legislature’s list: A huge debate on how much to invest and how to raise it

Downtown Minneapolis from I-35W
Photo by Greg Benz
Time-lapse image of the traffic on I-35W south of downtown Minneapolis.

Minnesota’s transportation problem isn’t all that hard to understand. It’s a bit like the young couple that moved into a starter home years ago, but failed to keep up with repairs or add rooms to accommodate a growing family. Now the roof leaks, the yard runs tall with weeds and the kids are sleeping on the floor.

The state’s shortcomings are increasingly apparent. The rate of increase in metro freeway congestion is among the nation’s highest. Demand for transit is at a 25-year high.

The question is what to do about it. It’s perhaps the biggest question facing the Legislature as it reconvenes this week. After two decades of arguments pitting roads against transit, outstate against metro and Republicans against Democrats, a fatal bridge collapse may have finally concentrated the collective mind. Yet even that offers no guarantee of compromise.

Partisan nastiness flew again Tuesday as the DFL majority rolled out its latest version of a transportation bill and Republicans declared it dead as a doornail. Twice in the last three years, the Legislature passed transportation bills that raised the gasoline tax for road and bridge repairs and construction, and allowed a rise in the metro sales tax for transit expansion. Twice Gov. Tim Pawlenty vetoed the bills, objecting to the taxes and offering instead to borrow record amounts for transportation improvements. Whether the DFL and dissident Republicans finally have the strength to override is uncertain.

Differences lie not only in the means of finance but in the scope of what those investments would accomplish.

Plans to borrow $416 million
Pawlenty’s proposal is to borrow $416 million – nearly 40 percent of his bonding package. That’s more money than the state has ever borrowed in one year for transportation. Its effect would be to accelerate dozens of projects now stalled in the construction pipeline. More than half of the money, $224 million, would go to repair and rebuild local bridges over the next several years. Another big chunk, $125 million, would contribute to two major transit projects: the Central light rail line and the I-35W bus/toll lanes connecting Minneapolis and Burnsville.

While significant, the governor’s plan is essentially a one-time venture that doesn’t make much of a dent against the state’s overall transportation shortfall. MnDOT, the state transportation agency, and the Metropolitan Council, which operates transit in the metro area, estimate that Minnesota is running short by about $2.5 billion a year for the next 20 years. Pawlenty’s plan covers about 16 percent of that annual deficit, and only for one year. That’s its big disadvantage. Its great attraction is that it avoids tax increases at a time when many families are hard pressed.

In addition to his borrowing plan, the Republican governor is considering parts of a proposal from the Minnesota Chamber of Commerce, including additional borrowing for roads and a dedication of sales tax revenues on rental cars for transit. He has signaled his opposition, however, to the size of the chamber’s 7.5-cent-per-gallon gasoline tax increase proposal and its plan to raise license tab fees. (The chamber, while acknowledging a $100 million per year shortfall for transit, offers no complete funding to fill that gap.)

Bob McFarlin, MnDOT’s deputy commissioner, sees the governor’s approach as a compromise. “The opposition’s scorched-earth tactics haven’t worked,” he said. “Their all-or-nothing approach doesn’t match reality.” McFarlin’s comments reflect the governor’s view that the DFL fails to place transportation within the context of total state needs and limitations.

Phased-in gasoline tax increase

Indeed, the Legislature’s DFL majority offers a sharp contrast in both philosophy and scope. Rather than pass a temporary measure, it wants to make a major on-going commitment to erase the transportation shortfall. To do that, it proposes a phased-in gasoline tax increase for roads and bridges, starting with 2 cents and moving to 7.5 cents.  It also allows metro counties to raise the sales tax by a half-cent to finance extensive expansion of the bus/rail transit network.

Those new revenues, combined with a hefty borrowing proposal, would provide a steady stream of money, both to build and maintain roads and bridges and to transform major transit projects like Southwest and Bottineau Boulevard from pipedream to reality. The size of the package, roughly $840 million, is twice the size of the governor’s, and its on-going scope makes a far greater impact on the transportation shortfall in the ensuing years. Its big disadvantage, of course, is that it requires new taxes, never a popular thing.

In 1982, the average Twin Cities motorist spent six hours a year stuck in traffic. By 2005 it was 43 hours.
In 1982, the average Twin Cities motorist spent six hours a year stuck in traffic. By 2005 it was 43 hours.

Senate Transportation Committee Chairman Steve Murphy, DFL-Red Wing, emphasized job creation and “kick-starting the economy.” Rep. Frank Hornstein, DFL-Minneapolis, chairman of the transportation policy subcommittee, said, “We’re not willing to keep transit a second class citizen.” Without a dedicated stream of new money, transit projects — so critical to the metro future — cannot move ahead, he said.

And so, returning to the metaphorical family crammed into the ramshackle house: the governor’s plan would send them to the bank for a loan to patch the roof and hire a neighborhood kid to cut the grass next summer. The Legislature’s plan would compel Mom and Pop to start an investment fund to pay for on-going home improvements. That would take sacrifice, but might one day allow the couple to pass along a more valuable property to their kids.

Beyond the different financial approaches, two big global forces weigh down on Minnesota’s decision: climate change and energy insecurity. Cars and trucks account for a quarter of the state’s carbon emissions. Policies that promote less driving, better transit and more compact living patterns would help the environment and reduce reliance on high-priced oil. The Legislature’s plan speaks to those concerns.

It comports generally to the recommendations published last week by the National Surface Transportation Policy and Revenue Study Commission, a bipartisan panel appointed by Congress to examine long-term transportation needs. The commission estimated a national shortfall of $225 billion per year over 50 years. Meeting that challenge would require raising the federal gasoline tax 5 to 8 cents per gallon per year for the next five years, after which the tax would be indexed to inflation to cover the rising costs of construction. The effect would be to raise gasoline prices toward levels elsewhere in the western world.

In addition, the commission proposed substantial private investment including tolls and congestion-pricing on the busiest urban roadways. It emphasized also the need to streamline construction and to reform Congress’ “earmark” system as a way to ensure efficiency and restore public confidence.

The nation stands at a crossroads, the report said. Without increased investment it will lose competitive advantage. Moving forward, it urged a “culture shift” toward mass transit and intercity rail travel. “We cannot sit back and wait for the next generation to address these ever increasing needs,” it concluded. Quoting Minneapolis Mayor R.T. Rybak, the report emphasized the need for “long-term, consistent investment,” even if the whole public cannot yet see the priority.

Another view
Nine of the commission’s 12 members, a majority of them Republican appointees, endorsed the report. But three Bush administration members dissented, including Transportation Secretary Mary Peters.

Peters, while acknowledging the crisis, offered a starkly different diagnosis and treatment (PDF). The problem is not that the supply of roads and transit systems has failed to keep up with growing demand for travel, but that people fail to use roads efficiently. They fill them up only during peak periods. If people changed driving habits, then new roads would not be needed in such numbers. People’s habits won’t change in precise ways by raising taxes. But charging tolls on the busiest roads will discourage travel on them. People will then choose to drive in off-peak times or take other, cheaper routes, she said.

Roads ought to be treated as any other commodity in a market economy and priced accordingly, Peters argued. A new pricing system must be devised to reflect “the true costs of using or providing transportation infrastructure,” one that focuses on “performance rather than simply connectivity and the size of the system.”

Her solution for the family with the too-small house might be to charge dues for family members who insist on congregating in the kitchen. Spreading throughout the house would be more efficient; the kids, perhaps, could sleep in their parents’ beds while the parents were at work.

Peters’ notion that roads are more akin to a product for purchase than a public conveyance carries considerable appeal. It more clearly pinpoints the true costs of driving. But it’s a radical departure from the system that developed over the last century, most notably from President Dwight Eisenhower’s concept of the Interstate system. Some critics suggest that, taken to extremes, Peters approach would bring gavel roads back to rural areas while allowing private road operators to reap massive profits on urban expressways. Whatever the case, it’s clear that Minnesota’s transportation debate is part of a national challenge that has overtones of ideology and deep division.

Steve Berg, a former Washington Bureau reporter, national correspondent and editorial writer for the Star Tribune, reports on urban design, transportation and national politics. He can be reached at sberg [at] minnpost [dot] com.

Comments (3)

  1. Submitted by Bernice Vetsch on 02/13/2008 - 04:49 pm.

    “My ideal citizen is the self-employed, homeschooling, IRA-owning guy with a concealed-carry permit. Because that person doesn’t need the goddam government for anything.” So says Grover Norquist, founder and leader of Americans for Tax Reform and The Leave Us Alone Coalition. Author of the No-New-Taxes Pledge (the Taxpayer Protection Pledge is its actual name)signed by Governor Pawlenty and quite a few legislators: “I, ______, pledge to taxpayers of _________ and all the people of this State, that I will oppose and veto any and all efforts to increase taxes.”

    It’s not simply that “raising taxes is unpopular.” It’s that asking the wealthy to pay at least the same percentage of their incomes in taxes as the poor and middle classes do has become, for those who sign the pledge and follow Grover no matter what, an absolute no-no. It must be defeated no matter the cost to the state in infrastructure decay, diminution of city services, rises in property taxes, and the loss of businesses that need an up-to-date transportation infrastructure as well as educated, healthy workers.

    I think calling DFL legislators who seek a return to sound fiscal policy and fair taxation “partisan” is inaccurate.

  2. Submitted by Karen Sandness on 02/18/2008 - 12:26 pm.

    Twenty-five years of ideological domination by Republicans and conservative Democrats, and what do we have to show for it both nationally and in Minnesota?

    Deteriorating infrastructure, deteriorating schools, deteriorating libraries, deteriorating real incomes for most people, deteriorating access to health care, a deteriorating economy, a deteriorating environment—well, it’s hard for me to think of something that ISN’T deteriorating under the twin Republican/conservative Democratic ideologies of “no new taxes” and “Government spending is inherently wasteful and useless, unless it provides goodies for the defense industry.”

    What makes the Republicans’ siren song of “no new taxes” so effective is that the working and middle class ARE financially strapped, the working class because their real wages are below what they were in 1979, and the middle class because they’ve tried to finance the life they see promoted on TV through borrowing.

    The dirty little secret, though, is that the super wealthy and the corporations have never had it so good.

    They’ve played upon the ignorance of the general public about how corporations are taxed to make people believe that higher corporate taxes will lead to job losses and higher prices.

    In fact, corporations are taxed on what’s left over AFTER they’ve paid all their costs of doing business, including employee pay and benefits, investments in equipment and buildings, acquisition of raw materials and merchandise, and any of the other dozens of legitimate expenses that a company can claim.

    In other words, hiring more people or paying them more or opening a new plant actually reduces a company’s taxes.

    You’d never know it, though, from the right wing jocks who dominate talk radio here and elsewhere.

  3. Submitted by Ross Williams on 02/22/2008 - 09:33 am.

    Far from lack of investment being the problem, the increasing traffic and congested roads in the Twin Cities area are a direct result of all the investments in road capacity over the past 25 years.

    The huge increases in road capacity to rural areas around the Twin Cities has made the spread of auto-dependent bedroom communities possible. The people who live in those communities have few alternatives to driving their car. No matter how painful the congestion makes it, they have few alternatives to using their car to get to work, shopping or recreation.

    The type of capacity has made that problem even worse. Limited access freeways give priority to those who live furthest from their destination. As MnDOT’s ramp metering study showed, suburbanites get to work faster while those living closer to work are delayed by ramp meters. Like ramp meters, limited access points to freeways shift congestion from the highway to the local roads that serve those access points.

    In short we have a highway system that is built to encourage people to make more and more use of their cars and discourage other modes of travel. That serves the highway engineers at MnDOT and the road building industry. But it doesn’t really make the state a better place to live. Give they more money and they will make matters worse.

    As for maintenance. MnDOT is deferring needed maintenance in favor of building new capacity. The cost of fixing those poorly maintained roads is much higher than the cost of maintaining them. A coat of paint is cheaper than replacing rusted out equipment and a regular sealcoat on roads will help prevent them from needing a mnore costly overlay of asphalt. And an overlay of asphalt is cheaper than letting the roadbed to deteriorate so that the road needs to be rebuilt.

    The argument can be made that we should do both. Maintain what we have and build new capacity. But the reality is that is not what is happening. MnDOT’s culture values engineering and building roads, not running maintenance crews. Given the choice between building a road and maintaining an existing road and they will choose the new road every time.

    If you want to understand the process drive Highway 169 from Grand Rapids to Nashwauk. There is a new “bypass” built around Bovey that will take three or four minutes off your trip. But look at the existing highway along that route that has been there for years and you will see that the roadbed is starting to break down. No doubt it is on the engineer’s list to be rebuilt. But it wouldn’t be necessary if they had properly maintained it in the first place.

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