As the Minnesota Legislature heads into important votes today on a $7.8 billion 10-year funding package for roads, bridges and transit across the state, here are a few points to keep in mind:
If the plan’s fuel, vehicle and general sales tax increases fail, virtually every Minnesotan’s tax bill for mobility is all but certain to keep going up anyway. The new revenue just won’t flow in any logical relation to the taxpayer’s use of the transportation system.
That’s because continuing Minnesota’s 20 years of inaction on statewide transportation funding will keep upward pressure on property taxes, which a new report reveals have shot up 45 percent faster than inflation just to pay for local roads.
According to the nonpartisan Minnesota House Research report, own-source spending on roads by counties, cities and townships across the state totaled $1.2 billion in 2005, up from $528 million in 1990. Over the same period, state and federal road aid to Minnesota local governments – mostly from user fuel taxes – rose only half as fast, falling 9 percent short of matching inflation.
Local roads, which carry 41 percent of Minnesota’s traffic, get 38 percent of the state’s fuel taxes and vehicle registration fees. Increasing those levies for the first time in two decades would significantly shift the burden for local roads and bridges from property taxpayers and onto road users.
Governor Tim Pawlenty, who has mostly ignored the needs of local roads and bridges since taking office in 2003, now proposes more than $250 million in general obligation state borrowing to help them out. Under his plan, the debt would be paid off via non-user income and sales taxes.
Since it was instituted in the 1920s, Minnesota’s gasoline tax has been constitutionally dedicated to “highway purposes.” That means it can’t be spent on transit, welfare, or anything else.
State Rep. Bud Nornes of Fergus Falls, however, seems to think the transportation funding package could reverse that. In a letter published Saturday in the Fergus Falls Daily Journal, he said the plan “opens the door to applying revenue from gas taxes toward funding things like light rail lines in the metro area.”
He didn’t explain how that could happen without a constitutional amendment approved by voters, which the funding proposal doesn’t call for. And he didn’t respond to an email seeking further details.
To its credit, the Daily Journal wasn’t fooled. Three days later, the newspaper, the leading media voice in Nornes’ legislative district 10A (described by “Politics in Minnesota: The Directory” as “firmly Republican”) editorialized that Pawlenty’s veto threat “seems to fly in the face of public sentiment to fix Minnesota’s roads and bridges.” It continued:
“We’re asking Pawlenty to back off his threat and sign the transportation bill … Pawlenty needs to understand that our state’s economy was built on the state’s excellent infrastructure … We understand the benefits of keeping taxes low. But we believe that, in the case of our roads and bridges, the funding the Legislature has proposed would be money well spent.”
Two timely new studies of road financing in Minnesota should be required reading for the governor, legislators and anyone who cares about infrastructure that is vital to our economic prosperity.
The most recent is this week’s evaluation report on state highways and bridges from the nonpartisan Office of the Legislative Auditor. Most glaringly, it found that the state Department of Transportation has systematically sidestepped its own “preservation first” policy by spending more than half its road work resources on system expansion, leaving existing roads crumbling. Meanwhile, MnDOT says its dollar needs for road and bridge preservation in next decade will equal its entire projected construction budget – unless new funding is provided.
A chief cause of this squeeze, the audit report said, is near-70 percent inflation in total road construction prices since 1999 while resources remained essentially flat. “In response, most districts chose to focus on lower-cost fixes (like thinner overlays for road resurfacing) and the state’s most traveled roads and bridges,” the report noted. “As the state gets farther behind, the cost to recover gets higher and higher.”
Finally, this month’s “20 Years Behind: Highway Spending & Revenues by Minnesota’s State Government, 1986-2006” by Matt Kane of Growth & Justice documents a huge two-decade cumulative funding shortfall for our state’s roads and bridges when inflation and a 69 percent increase in vehicle miles traveled are taken into account. According to Kane’s analysis, Minnesota came up nearly $14 billion short over that period of matching its investments in 1986.
We’ll probably never make all that up. But don’t let anyone tell you that $7.8 billion over the next decade is “overreaching.”