The $11 billion question — that no one can answer

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

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).

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.

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.”

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.”

Comments (14)

  1. Submitted by THOMAS REYNOLDS on 02/26/2015 - 11:05 am.

    Unmet Needs

    I have to agree with the governor. We need a long term plan on the transportation issues we are facing for today and tomorrow. Funding is always an unpopular topic for legislators and the general public. It is unfortunate that often we are pound foolish and penny wise. We will all be changing our driving and transportation habits over the next 10-20 years, but there are fundamental infrastructure needs that will not change. Sometimes you have to believe in the studies and move to fund.

  2. Submitted by Michael Hess on 02/26/2015 - 12:20 pm.

    history

    ““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”….. thats not been our experience to date with the Governor. If he raised $6B but in the end only needed $5B he’d find a “good use” for that extra $1B before dialing back a tax increase.

  3. Submitted by Dan Landherr on 02/26/2015 - 01:16 pm.

    Economic impact

    Is someone going to demand that road spending pay for itself like they do for mass transit? Do we need the fifth largest transportation system in the nation? Minnesota is 12th in area and 21st in population.

    • Submitted by Wayne Coppock on 02/27/2015 - 09:24 am.

      I’ve been demanding this for a long time and everyone has been laughing at me.
      If road users paid even the portion of costs that public transit users did, many of them would probably want to start using mass transit instead because it’d be a better deal.

      We could probably do away with 1/3 or more of the lane miles in the state and hardly anyone would notice the difference other than the MNDOT accountants, but keeping that pork flowing outstate is crucial to the reelection bids of so many legislators. Never mind that most of it comes from the metro, which they won’t even let fund its own transit needs (because that’s money they want to take and build roads used by 50 people in the middle of nowhere with!).

  4. Submitted by Beth-Ann Bloom on 02/26/2015 - 03:38 pm.

    Transportation decisions

    The Republicans named Representative Kelly to chair the House Transportation Committee even though he had never previously served on the Committee. As this article highlights transportation policy is very technical and complicated.

    No wonder Rep Kelly can’t propose a transportation plan-he’s just learning how the system works.

    Time to listen to legislators and other leaders who understand the system in all its strengths and weaknesses as decisions are made for the safety of citizens statewide.

  5. Submitted by Dennis Wagner on 02/26/2015 - 07:19 pm.

    Kick the can

    Good old republican kick the can financial politics. Better to talk the problem to death, or throw a few borrowed coins at it, perhaps it will go away until the next election, don’t want to actually do anything about it.

    • Submitted by Wayne Coppock on 02/27/2015 - 09:26 am.

      If they actually fixed something then they couldn’t blame democrats for the problem next election season. Why actually accomplish anything when you can create a perpetual problem to point to as the other guy’s fault every time you need an election issue?

  6. Submitted by matt robertson on 02/26/2015 - 09:33 pm.

    Bicycles

    i realize bikes are not a necessarily viable solution for Minn., for the many other states that are facing these types of problems bicycle infrastructure starts to look like an affordable alternative. It’s not just for recreation.

  7. Submitted by Paul Udstrand on 02/27/2015 - 08:31 am.

    Disappointing article and misleading title

    I’m afraid this is the journalism one typically finds in place the Strib and it’s disappointing to find it here. False equivalence is a standard feature of pseudo-balanced coverage, it’s not good journalism.

    The fact is that there is no question here that has not been answered. Nor is there an answer that “no one” agrees upon. We have a data driven budget that is the product of consensus and extensive study… and then we have a budget that republicans pulled out of thin air. Any attempt to treat these two budget as equally rational is less than honest.

    Even the republicans describe the “range” of estimates as running from $11 billion to $80 billion, yet they’re budget is $3 billion.

    There is no “no one”. We have a group of people who agree with the governors budget, some off whom may even think it might still insufficient. And then we have republicans who can’t get their head around the problem.

    This attempt to pretend that a republican budget that’s almost 75% lower than the governors might be supported by some kind of data or rational difference of opinion, is a waste of our time.

    • Submitted by Tom van der Linden on 02/27/2015 - 10:06 am.

      Yes, parse the traffic study in more detail

      I agree with Paul. Take some time to comb through the transportation panel’s recommendations. Start with something relatively easy to quantify – perhaps lane miles of US highway, or lane miles of county roads. 725 million or 5 billion, just for that? Ask a MnDot district engineer for comment – or maybe a couple county engineers. Research and quote what projects were bid in the last 2 or 3 years.
      Or, use the statistical technique of tossing out the cheapest and most expensive projects ($200 million or whatever it is for one HIghway 53 bridge into Virginia, for example). Establish a baseline.
      Allowing politicians to toss up their hands and exclaim “it’s just too hard!” is letting them off too easy.
      I understand the difficulty of reporting on such a huge project, so break it down to make it easier to research, edit and report. (Will make it easier for simple readers like me to understand, too!)

  8. Submitted by joe smith on 02/27/2015 - 08:31 am.

    Repairing roads is really complicated? Only in politics can they take a simple problem like does a road need to be re-paved or not and say it is complicated. When your politicians say it is too complicated for you little minion voters, who supply us with every dollar we spend, to understand get ready to be screwed somehow.

  9. Submitted by Paul Udstrand on 02/27/2015 - 09:07 am.

    Republican la la land

    If this were our first time at the dance we might be forgiven for cutting republicans some slack, but alas we seen this magical thinking countless times.

    You have budget estimates ranging from $20-$80 billion so you offer to spend $3 billion? Yes, because the answer is always: “no new taxes”, and “smaller” because when you cut budgets problems magically fix themselves. If we spend more than what? 25% of what we should spend, maybe the magic won’t happen?

    I remind people that when republicans were in power they magnified this problem exponentially with their magical thinking.This is exactly how the 35W bridge collapsed.

    According to Barry LePaner’s review of MNDOT’s decision making process (Too Big To Fall: America’s Failing Infrastructure and Way Forward, 2010); despite the fact that engineers had been pointing at those infamous gusset plates for years and recommending $15-$20 million in repairs, MNDOT under the republican lieutenant Governor Mulnau’s management, placed a $3.5 million cap on any repairs they would do on that bridge. This made it impossible to carry out the necessary repairs and essentially doomed the bridge to collapse. Since then, the states transportation system has continued to degrade.

    When you refuse to perform necessary maintenance for nearly ten years, not only do the bills pile up, but the system degrades to the point where more extensive and expensive repairs and replacement become necessary. This is how you turn a $15 million bridge repair into a $100 million dollar bridge replacement.

    The problem with the republican preference for perpetual budget crises is that their never ending budget and revenue cuts make efficiency impossible. For all their bloviating about government “efficiency” republicans can never deliver because they have a basic inability to do the math. So they pull numbers out of thin air and wait for the magic.

  10. Submitted by Paul Udstrand on 02/27/2015 - 10:05 am.

    So much for the rural vote by the way

    First, we have almost more miles of roads and bridges per capita that any other state in the country, and the fifth largest system, so the idea we’ve “wasted” all our money choo choos is obviously daft.

    Second, democrats want to spend at least three times more on repairing and replacing all those miles of roads and bridges than the republicans… yet rural voters thought they’d get more “balance” from republicans? The only you ever get “more” of from republicans is: “nothing”.

  11. Submitted by joe smith on 02/28/2015 - 10:43 pm.

    The good folks of Buck Lake MN are not worried that highway 65 is not getting resurfaced enough, they’re worried about the 50 ft easement on waterfront property that Dayton wants to impose, they’re worried about property taxes going up, they want gas as inexpensive as it can be not taxed more, they WANT to be able to shoot wolves that come into their yards to eat their dogs, they want the mines up and running. That is the “balance” they want not pork filled road projects.

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