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The $11 billion question — that no one can answer

Even for the experts, putting an exact dollar figure on Minnesota’s transportation needs is no easy task. In a highly politicized environment like the Capitol, it borders on the impossible. 

MnDOT Commissioner Charlie Zelle, left, addressing reporters during Wednesday's press conference as Gov. Mark Dayton looks on.
MinnPost photo by Briana Bierschbach

In January, when DFL Gov. Mark Dayton first heard the details of House Republicans’ plan to fix Minnesota’s crumbling network of roads and bridges, he called a 40-minute press conference to accuse them of trying to solve someone else’s transportation problems.

Whose problems? According to Dayton:  the citizens of “La La Land” and “Fantasy Island.”

In terms of his own priorities, the second-term governor had reason to be discouraged. The plan he ultimately released calls for a nearly $11 billion investment in the state’s roads, bridges and transit systems over 10 years, including $6 billion just for state-run roads and bridges, paid for by raising fees and the sales tax on gas at the wholesale level.

But Republicans in control of the House balked at raising billions in new revenue from taxpayers. Instead, they pitched a short-term fix: a plan to put $750 million over four years into roads and bridges – but not transit – paid for out of a state budget surplus and savings at the Minnesota Department of Transportation (MnDOT).

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Taken on a yearly basis, the difference between the plans amounted to $200 million of spending versus $1 billion.

Despite those vast differences, little has changed since the opening weeks of session; in fact, both sides seem to be doubling down on their respective plans. Dayton and his administration have started traveling around the state to ratchet up the pressure to pass his proposal.

Meanwhile, though the Republicans’ transportation plan won’t come out for a few weeks, House Transportation Finance and Policy Chairman Tim Kelly has already made it clear that the plan won’t raise revenues and will only focus on the current budgeting period.

“The bottom line: We all agree that transportation needed to be elevated at this point in time because we saw the need,” Kelly said. “We just haven’t agreed on that 10-year plan, whether you want to call it a $10 billion need or a $50 billion need. We just don’t have agreement on that.”

Trying to determine that number, however, could be a fool’s errand. Even for the experts, putting an exact dollar figure on transportation needs is no easy task. In a highly politicized environment like the Capitol, it borders on the impossible, since so few trust the information they are getting anyway. 

“I always try to give people ranges, but everybody wants a number,” said David Ellis, a researcher at the Texas A&M Transportation Institute who was asked to try and determine a similar number for the Lone Star State’s transportation system back in 2010. “Once you say that number it becomes gospel, and then it gets politicized.”

‘Unmet needs is a political term’

The numbers have already become political in Minnesota. Dayton’s figures are derived from a 2012 report from the Transportation Finance Advisory Committee (TFAC), a bipartisan group of lawmakers, union members and business representatives the governor assembled to study the state’s transportation needs.

After more than a year of meetings, the group concluded that the state needs at least $250 million per year just to maintain the state-run highway system, which carries the most traffic. Even more would be needed for local governments to patch up their roads.

But the biggest numbers came out of discussions about how to create a system that could handle future economic and population growth in Minnesota. To adequately accommodate those needs, the group recommended spending $21 billion over the next 20 years. Dayton lopped the number in half for his proposal, but even that was tough for some to swallow.

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The Minnesota Chamber of Commerce, which currently opposes new taxes for transportation, is one of several groups that have commissioned a study of Dayton’s TFAC study, referred to in St. Paul as the “Hutchinson Report,” after its lead researcher, former finance commissioner and Independence Party Candidate Peter Hutchinson.

The problem, said former Republican Rep. Michael Beard, who served on the TFAC, is that the numbers are so big that it’s hard for people to wrap their heads around how the money will be spent. “I’ve heard $40 billion, I’ve heard $20 billion; I think someone once threw out $80 billion over 20 years,” he said. “Unmet needs is a political term, that usually means the unmet needs in the eye of the beholder.”

For his part, Dayton and his administration are defending the TFAC numbers. “I didn’t try to influence that report,” the governor said. “These are the experts from a variety of transportation related sectors who met continuously over the year and that was their report and their analysis. I understand now some groups are coming in and having someone do a quick analysis to try and discredit this. If you hire a consultant to tell you what you already know…that’s typically what you get.”

MnDOT Commissioner Charlie Zelle said engineers in the department used models looking at pavement conditions that affirmed much of what the TFAC report found. “This is what we see; this is what is needed,” he said.

The trouble with setting a number

But transportation networks are complicated, and there are a lot of challenges in trying to pinpoint an exact dollar figure to meet all the needs.

For starters, Minnesota’s transportation system is massive. It’s the fifth largest in the nation, with more than 142,000 roadway miles and 20,000 bridges. And that doesn’t include the growing network of train lines, bus routes and bicycle lanes in the seven-county metro area.

The network of entities that take care of the transportation system is also complex. When a road is broken, government pays for it, of course, but which government? Some roads are paid for by state dollars, and others are funded completely by local governments. Still others get money from both.

It doesn’t help that funding streams for transportation are increasingly unpredictable. The amount of transportation dollars states get from the federal government is shrinking, and so are revenues from Minnesota’s 28.6-cents-per-gallon gas tax, thanks to the increasing popularity of public transportation and more fuel-efficient vehicles. It’s also difficult to predict the cost of road construction materials, which can be volatile.

“That’s where a lot of professional judgment is involved and looking at trends, what has happened in the past is a good indicator of where things are going,” said Ken Buckeye, the TFAC project manager for MnDOT. “We didn’t try to create an alarming picture. We were just trying to lay it out there using data and experts looking at the trends.”

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There are other factors that are hard to anticipate, too: floods or other natural disasters that can destroy roads; how much population will swell over time in certain areas; and how technology changes the way we travel. For instance, less people are driving to movie theaters or video rental stores with the advent of television streaming. And where most people had to take individual trips out of their homes to go shopping, online retail allows a handful of delivery trucks to cut back on some of that travel, says Texas A&M’s Ellis.

“Predicting the future is hard to do,” he said. “Last September, when oil was $100 a barrel, would any of us have predicted it would be $52 dollars a barrel?”

The pressure is on

To make the case for his numbers, Dayton released a list of more than 600 projects that his plan would fix, and members of his administration are traveling around the state to highlight some of the major projects. The move has irked Republicans, who say the governor is trying to earmark projects to put pressure on individual lawmakers.

“Transportation is always very political, because everybody uses the transportation system every day and there is an expectation that that system is going to work for you,” said Lee Munich, a transportation policy and finance fellow at the University of Minnesota’s Humphrey School of Public Affairs. “Legislators hear about the roads in their district so every legislator is sensitive to this subject. The governor is saying, let’s go and fix everything, and here is what those things are.”

In Texas, Ellis said the numbers were just too big for legislators to tackle all at once. “Transportation went into the ‘Too hard’ box,” he said. Over time, Ellis said, the Texas Legislature has started to address transportation needs by biting off small chunks of the funding a need at a time. In Minnesota, Kelly is asking the Democrats to give his caucus time to digest the problem and determine the need.

“If it ranges from $2.5 billion to $10 billion, then for me, that’s really hard to go to my caucus to raise revenue for some need that we don’t even agree on,” Kelly said. “We’ve suggested from the start,  just give us time to reach agreement with the governor and the Senate, but let’s not forget our responsibility in the short term, which is this year’s budget and the next four year’s needs.”

But Dayton and Democrats have little interest in doing that. MnDOT says more than half of state-run roads are 50 years old, and in the next three years, one out of five state roads will pass their useful life. In the next 10 years, that will swell to nearly 40 percent. Next session it will be even harder to pass new money for roads and bridges, with legislators facing the voters that fall.

“I think there should be a collaborative effort with the four caucus transportation leaders to sit down and look at the facts,” said Dayton. “I have no desire to raise $6 billion in revenues if $6 billion is not needed to do what we say it’s going to do here. On the other hand, I’m not going to willingly allow others to grossly underestimate the cost so they can avoid the tough decisions.”