The orange barrels are back. Minnesota’s second season — road construction — has commenced, with 246 state road and bridge projects and delays, detours and driver frustration in the seven-month forecast. That’s 44 fewer projects than in 2015 — not a worrisome decline, yet. But the long-range outlook is not good for a state whose economic vitality and quality of life is much dependent on safe and sufficient highways and transit.
“MnDOT is expected to experience a funding shortfall in 2018 … that will reduce ongoing state road and bridge funding by 45 percent,” the Minnesota Department of Transportation advised last week. That precipitous shortfall would come at a most inopportune time in the infrastructure life cycle. “In the next 10 years, nearly 40 percent of our roads will be past their useful life,” MnDOT’s release said.
In addition, metro population growth and an aging population statewide are creating demand for transit that’s outstripping available funds. And a deadline is near for a federally required 10 percent state contribution to a proposed extension of the Green Line from downtown Minneapolis to Eden Prairie.
In short: A state transportation funding boost can’t wait. In the next five weeks, Gov. Mark Dayton and the 2016 Legislature are duty-bound to strike the best bargain they can to increase funding for roads, bridges and transit. The old saw about half a loaf applies in this situation. DFLers and Republicans should go as far as they can toward meeting needs pegged at $16.3 billion over the next 20 years.
To the extent they fall short, Minnesotans should insist that state lawmakers revisit the issue soon, perhaps as early as next year. Legislators have fallen into the bad habit of passing a major transportation bill once each generation. They might be better stewards of this crucial governmental service if they would aim for modest adjustments every few years.
Here’s what we advise:
• Don’t give up on a gas tax increase. The constitutionally dedicated per-gallon tax on motor fuels remains the workhorse of the state Trunk Highway Fund. At 28.5 cents per gallon, it’s just below the 29.64-cent national average for state and local fuel taxes. That’s not adequate in a cold-climate state that ranks fifth among 50 in paved road miles. Each additional penny added to the tax would raise $30 million per year.
• Tap the general fund — gently. Republican resistance to a gas tax increase runs deep. They prefer to divert a $300-million-per-year tax stream from the general fund to highways — a plan that House Speaker Kurt Daudt acknowledges would “starve out the general fund.” That’s “a really good thing,” Daudt told a GOP audience last weekend.
DFLers vehemently disagree, with a valid point: The general fund supports too many services vital to Minnesotans’ well-being to risk its starvation. But a modest diet seems affordable. As the Star Tribune Editorial Board recommended April 10, we would transfer lease and rental car tax proceeds to the highway fund — $75 million per year — and hope that a modest gas tax increase could be accepted by Republicans in exchange.
These additional money-raising options would turn a skimpy bill into a responsible one:
• Raise the motor vehicle excise tax rate from 6.5 percent to 6.875 percent, to match the general sales tax rate. That would raise $27 million for highways and $18 million for transit annually.
• Boost license tab fees, for at least an additional $150 million per year. That can be done with some combination of a slower depreciation schedule for newer vehicles, a higher tax rate or a boost in the minimum fee from, say, $35 to $50. That increase is well-justified. If that minimum had been indexed to inflation when it was last raised in 1983, it would be more than $83 today.
• Make roads and transit a bonding bill priority. The 2014 bonding bill directed $40 million to local roads, bridges and Greater Minnesota transit, and an accompanying cash bill added $50 million more. Both sums should be at least doubled this year. (This is among several good reasons for cracking the outdated $1 billion bonding bill ceiling.)
• Allow metro counties to raise the sales tax for transit. The forecast of an additional 1 million metro residents by 2040 is a call to action on transit improvements. GOP skepticism about light rail’s value should have been put to rest by the Green Line’s ridership success story. But if Republicans won’t let the state pay its share of the Green Line’s westward extension with Southwest LRT, they should at least allow the seven metro counties to add a half-cent to the existing quarter-cent metro sales tax dedicated to transit. That should be sufficient to underwrite the planned buildout of a true rapid transit network in the Twin Cities.
The state’s other 80 counties were granted the authority in 2008 to increase local sales taxes and impose up to a $20 excise tax on vehicle sales to pay for specified transportation projects, including transit. Sixteen counties have done one or both of those things. In addition, all counties can impose a $10-per-vehicle wheelage tax (in effect, a license tab surcharge); 54 counties have done so.
Expecting counties to correct Minnesota’s transportation problem is less than ideal, and should be an embarrassment to state lawmakers. It’s likely to mean greatly differing local road conditions and transit services around the state, given the variation in counties’ ability to generate revenue. It also flies in the face of the “one state” ethos that has long served Minnesota well.
But the half-a-loaf truism applies here, too. County-driven transportation improvements are better than none at all. If state lawmakers refuse to deliver the transportation services that a majority of Minnesotans want and for which they are willing to pay, county boards have the taxing tools with which to do at least some of the job.