Minnesota faces a bumpy road in trying to fund transportation needs

Courtesy of MnDOT
Minnesota has the nation’s fifth-largest highway system, with more than 140,000 miles of state, county and local roads, and more than 20,000 bridges.

State Transportation Commissioner Charles Zelle is hitting the road to talk about — what else? — roads and the need for increased investment in Minnesota’s transportation system.

Zelle will try to convince Minnesotans not only that the tax dollars they now pay for roads, bridges and transit are being well spent, but that additional resources are needed to improve the system and keep Minnesota economically competitive.

“We don’t have highways and bridges and all these different transportation modes because we love concrete and girders and motor coaches,” he said in an interview last week.  “We have them because these systems support our quality of life, our health, our environment and our businesses.”

Zelle is launching the public outreach and education campaign at the direction of Gov. Mark Dayton. Last session, Dayton declined to support a gasoline tax increase for roads and bridges, apparently feeling that public understanding and support was lacking. As a result, legislators balked at a proposal the DFL governor did support — to increase the metro sales tax for transit.

Minnesota has the nation’s fifth-largest highway system, with more than 140,000 miles of state, county and local roads, and more than 20,000 bridges. It’s an aging system that is costly just to maintain. Fifty percent of the state’s highway pavements are more than 50 years old, and 40 percent of its bridges are more than 40 years old.

In its most recent performance report, the Minnesota Department of Transportation (MnDOT) said more than 14 percent of the state’s bridges were in fair or poor condition, and 6.6 percent of its highway pavements were in poor condition.

fair and poor bridges
Source: MnDOT
More than 14 percent of the state’s bridges were in fair or poor condition.

Meanwhile, transit advocates complain that the Twin Cities lacks adequate, reliable sources of funding to expand the bus system, continue building out the region’s system of rail and bus transitways, and keep pace with transit improvements in other major metro areas.

The need for additional transportation funding was detailed in a 97-page report  completed in December by a transportation finance advisory committee that Dayton had established.

Looking out over the next 20 years, the committee estimated that revenues would fall $21 billion short of what is needed to maintain the performance level of the existing transportation system, and more than $50 billion short of what is needed to build an “economically competitive, world-class system.”

To fill part of the gap, the committee proposed:

  • Increasing the gasoline tax by 10 cents a gallon in the first year and 1.5 cents a gallon in each of the next 19 years, generating $15.2 billion for roads and bridges over 20 years.
  • Raising motor vehicle license fees by 10 percent, raising another $1.1 billion for roads over 20 years.
  • Increasing the current quarter-cent metro sales tax for transit to a half-cent, generating more than $200 million a year for trains and buses.

Some version of this proposal is likely to be offered again once Zelle completes his sales job. He said these are likely to remain the major sources of transportation funding, though the gasoline tax base admittedly is eroding as vehicles become more fuel efficient and electric cars become more prevalent. Meanwhile, the cost of labor and building materials is rising, adding to the funding gap.

Transportation researchers in Minnesota and around the country have studied other revenue-raising options — including congestion pricing, tolling and mileage-based user fees — with the latter being the most promising.

Oregon is the farthest along in developing a mileage-based system. Last month, after extensive studies, the Oregon Legislature passed a law allowing up to 5,000 motorists to volunteer for a demonstration project in which they will pay 1.5 cents for each mile they drive on state roads and receive a refund for the gasoline taxes they now pay at the pump.

Lee Munnich, director of the state and local policy program at the University of Minnesota’s Humphrey Institute and an expert on transportation funding, is following the Oregon experiment closely.  However, Munnich does not believe mileage-based user fees are “ready for prime time” because of political and privacy concerns.

“You look at all of these alternative funding sources and the field narrows pretty quickly,” Munnich said. “The realistic options for the state come down to the gasoline tax for roads and the sales tax for transit.”

Munnich said many people would be surprised to know how little they actually pay in highway user fees.  According to MnDOT, the average Minnesotan drives 15,000 miles a year and gets 21 miles to a gallon of gasoline. At 28.5 cents a gallon, this driver pays $203 a year to use state roads.

In comparison, the typical Minnesotan pays $840 a year for cable television and $852 for cellphone service.

“Motorists should ask themselves, ‘How much is it worth to you to have better roads, smoother roads, fewer bottlenecks?’ ” he said.

Minnesota’s gasoline tax ranks 18th among all states. It was last raised in 2008, after the collapse of the I-35W bridge, as part of a larger transportation funding package (PDF) that also authorized the quarter-cent metro sales tax for transit.

Over the past quarter-century, Minnesota’s governors have provided little leadership on the issue of transportation funding. The 2008 funding increase was enacted over the veto of Republican Gov. Tim Pawlenty.

The state gasoline tax had not been raised since 1988, during the administration of DFL Gov. Rudy Perpich.

Independent Gov. Jesse Ventura actually reduced revenues for roads and bridges, persuading the 2000 Legislature to cap motor vehicle registration fees at $189 for new cars  and at $99 for renewals. (The Legislature repealed those caps in 2008).

Raising transportation taxes could be a political challenge in 2014, when the governor and all 134 members of the Minnesota House will be up for election. Politicians tend to shy away from voting for tax increases when their name is about to appear on the ballot.

The issue also could be complicated by the continuing dispute over the proposed alignment of the Southwest Corridor light-rail transit (LRT) line and the escalating cost of the project.  Once estimated at $1.25 billion, the cost of the 16-mile line between Minneapolis and Eden Prairie is now projected to be $1.6 billion or more.

Annette Meeks, a former chair of the Metropolitan Council’s transportation committee and now head of a conservative research group, said it was clear long ago that “there is no good alignment for that line. It’s beginning to look like one of those cage matches to the death.” The dispute is one that easily could spill over into the Legislature and imperil any proposal for increased transit funding.

For his part, Zelle said, he will “be very explicit about the need” for increased transportation dollars. “Does that mean the Legislature will pass something next year? I sure hope they do. Whether it is next year or the following session is going to be up to the Legislature and the governor to figure out.”

“As part of the administration, I’d say let’s at least have our eyes wide open, understand what is at stake and build as much awareness as possible about how critical transportation is — how we get a really solid economic return on these investments,” he said.

Comments (11)

  1. Submitted by Paul Udstrand on 09/12/2013 - 10:41 am.

    What happened to the magic?

    The problem is that Minnesotan’s didn’t believe strongly enough in the magic of tax cuts and now we’re being punished.

  2. Submitted by Peter Mikkalson on 09/12/2013 - 10:53 am.

    Re: Only yourselves to blame…

    The State of Minnesota has squandered the transportation related fees and taxes its been collecting all along-on themselves (salaries, benefits and astronomical budgets) and now comes hat-in-hand pleading poverty. Not another dime!

  3. Submitted by David Frenkel on 09/12/2013 - 10:56 am.

    Stop building new roads and bridges

    Why does the state continue to prioritize building new or upgrading roadways and bridges before fixing bridges that are crumbling. The idea that new is sexy and maintenance is boring has to be stopped.

  4. Submitted by Ray Schoch on 09/12/2013 - 10:57 am.

    Let the chorus begin

    I can almost hear the roar of dismay from people who, in almost any other circumstance, would be happy to find themselves labeled “pro-business.” Without an effective and efficient transportation network — specifically including funding and maintenance for pedestrians and cyclists, as well as automobiles, rail and truck transport — the state is going to find itself an economic backwater.

    As an aging retiree, I’d prefer not to end my days with the state’s transportation infrastructure collapsing around me, and I have children and grandchildren here that I don’t want to see killed or injured because we’ve decided not to maintain our roads and bridges. The recent Texas decision to eliminate pavement from its secondary highways — they call them “farm to market” roads, and according to what I’ve read, they’re intending to actively remove pavement from most of them and convert them back into gravel roads — is not one I’d like to see replicated here.

    Personally, I’d like a free lunch, please, meaning I’d prefer to pay nothing whatsoever for the roads and highways I use. They’re supposed to be “free,” aren’t they?

    In the real world, however, gasoline taxes are among the purest examples of something that people who call themselves “conservative” typically embrace wholeheartedly — the user fee. Not having raised the state’s gasoline tax since 1988 is truly a head-in-the-sand approach to highway funding. My personal bias is that raising the gasoline tax as suggested would be more effective, and might even be more fair, than whopping increases in vehicle registration fees and similar fiscal devices.

    In any case, while I’d like the free lunch, please, it just ain’t gonna happen. The state needs a good transportation system to stay economically competitive, and I don’t know of a way to fund that system except to do it ourselves. Raise the taxes.

  5. Submitted by Janne Flisrand on 09/12/2013 - 11:08 am.

    What about looking for ways to reduce maintenance costs?

    Have they considered narrowing roads, which makes for cheaper maintenance over time? Or reverting a few of those low-use roads to gravel? Maybe supporting more infill development so we can build fewer new suburban highways?

    It’s not just about revenue, it’s also about cost.

  6. Submitted by Frank Phelan on 09/12/2013 - 04:13 pm.

    Chamber of Commerce

    The Chamber of Commerce types have not been helpful on this. They talk about the need for better roads and bridges, then they turn around and march in lockstep with conservative politicians who continue to spout the no new taxes line.

    Maybe they’d vote for a “motorist impact fee”, a la Pawlenty’s health impact fee on cigarettes. Even Grover Norquist did complain about that when the Gov ran for Prez.

  7. Submitted by ALAN BELISLE on 09/12/2013 - 04:22 pm.

    Round and round we go.

    With highway funding so short, I am wondering why we are getting so many roundabouts built??? It costs a lot more to tear up the whole intersection and build the island and circle than it does to plant some STOP signs. Who got the roundabout bug at MNDOT? How can we stop the infestation of these horrible ideas before more of the state gets them jammed down our throats?

  8. Submitted by Tom Suther on 09/13/2013 - 09:07 am.

    Bridge from no where to nowhere

    Mr Zelle please spare me, you with full knowledge wasted over 54 million on a bridge from nowhere to nowhere. it is so grandiose that it looked like we had money trees all over. You used so much cement that wells probably went dry. Yopu stole more land than any bridge intersection should ever have. You and MnDot do not respect teh land at all. people take a look at the waste of the bridge north of Rochester. It takes me the time to go through three roundabouts then a bridge which I drive on the wrong side and then a turn onto the freeway. What a waste of money at a time when you say we need money.

    PLEASE SPARE ME AND THE PEOPLE OF MINNESOTA WITH YOUR TEARS AND BEGGING.

  9. Submitted by Paul Udstrand on 09/13/2013 - 10:21 am.

    No such thing as magic

    There’s a really good book by Barry Lapatner: “Too Big to Fall: America’s Failing Infrastructure”. The problem is that for decades the US and every state has failed to put anywhere near the necessary dollars into maintenance and repair. Consequently we have millions of miles of existing roads and tens of thousands of bridges that are now beyond repair and will have to be replaced… and nothing we do is going to make that process cheap… and the longer we delay, the more expensive it will be.

    MNDOT isn’t talking about building a lot of new roads and bridges where none existed, they’re talking about repairing maintaining existing infrastructure and replacing obsolete or irreparable structures and roads. On paper it looks like MNDOT is spending 52% of it’s budget on “new” construction but they’re actually replacing obsolete infrastructure with “new” construction. It’s not about “cutting back” or building fewer roads and bridges.

    Control costs? Well, that’s what MNDOT was doing when the 35W bridge collapsed. MNDOT put a cap on the amount of money it would spend for repair and maintenance per year and despite years of warnings and recommendations they tried the cheap fix (deck replacement) instead of structural repairs that had been recommended. All of this was effectively shoveled under the rug by MNDOT denials and an NTSB final report (which was completed in record time by Bush appointed NTSB commissioners) that claimed it was all a design flaw that everyone had missed for 40 years. Tracing MNDOT decisions to any one person or group is almost impossible but I remind you that our Transportation Commissioner at the time was a farmer/LT. Governor (Carol Mulnau) who was saving us money by doing two jobs for the price of one. Mulnau had absolutely no training or experience in running anything even remotely resembling an agency like MNDOT and her only qualification was her opposition to mass transit programs and her preference for new roads and bridges OVER repair and maintenance of existing ones.

    Judging from the comments it looks like a number of people just don’t understand the nature of transportation infrastructure. You don’t calculate “costs” simply by looking at the up-front construction costs, it’s about efficiency, long term, and broader transportation costs. It’s not a simple matter of whether or not a stop light is cheaper than a roundabout, or a dirt road is cheaper than pavement. If a stop light backs up traffic for blocks or miles you have to consider the additional costs of travel time and fuel that generates. Dirt roads aren’t cheap, they have to be regraded frequently and they have to be repaired more often. And then there’s safety, traffic accidents aren’t “free”, we bear the cost of traffic accidents in a variety of ways. Dangerous roads and intersections add cost to our transportation “budget” even when they themselves may be “cheap”. Existing obsolete infrastructure may be cheap, but it’s not saving us money because inefficiency generates a variety of costs. Sometimes cheap is more expensive in the long run. At any rate its always more expensive to let something deteriorate and replace it than it is to maintain it properly. We’ve let billions of dollars worth of transportation investments deteriorate to the point of collapse and replacement, there’s no cheap way out of this, and capping budgets will only make it worse.

    Finally I have to respond the comment about “bloated” salaries and benefits. Salaries and benefits account for 12% of MNDOT’s budget and that figure has been declining for 10 years (along with the quality of our infrastructure). Many of the engineers and experts on the state payroll could make more in the private sector (if there is a comparable private sector job). These are highly qualified and educated people that have chosen a career of public service and they are in no way overcompensated. You want collapsing bridges and narlled up streets, go ahead, outsource your civil engineering to cheap remote engineers in Bangladesh. I mean who needs to actually stand where a bridge is being built when you can see the area on google maps right?

  10. Submitted by Stephanie Menning on 09/13/2013 - 10:59 am.

    MNDOT is Happy to Charge Taxpayers more via DBE Program

    Unbeknownst to the taxpayers of Minnesota, MNDOT and the Office of Civil Rights are happy to have us pay more for their roads and bridges via the much criticized DBE/Workforce program and its subjective processes for awarding construction contracts through the Office of Civil Rights. The recent McCrossan lawsuit against MNDOT on the St. Croix Bridge footings construction is a perfect case in point. Minnesotans are now paying $6 million MORE than necessary for this construction and with McCrossan winning their suit… taxpayers can add an additional $300,000 on to their tab. All of it due to MNDOT’s inability to manage the DBE program to the intent for which it was created. The scathing audit of the Office of Civil Rights released in April 2013 reflects the mismanagement of the program, not to mention having 5 different Directors since 2009. Hold on to your wallets my fellow Minnesotans! You think $6.3 million is a lot money? Wait until you pay $20 to $80 million more for the new Vikings Stadium!

    http://stillwater.patch.com/groups/politics-and-elections/p/federal-lawsuit-questions-mndot-s-bid-process-for-st-2ed8bdf7bc
    http://finance-commerce.com/2013/08/mccrossan-mndot-settle-dbe-rules-lawsuit/
    http://finance-commerce.com/2013/06/audit-dbe-goals-collide-at-mndot/

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