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Home | Opinion Exchange | Editorials

Editorial: Ailing highway fund needs more revenue

Lagging gas tax receipts call elected officials to action.

Last update: December 5, 2007 - 6:39 PM

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HOW CITIES SEE IT

"Current funding for roads, bridges and transit systems across all government levels in the state is inadequate, and Minnesota's transportation system is failing to meet needs pertaining to public safety, population growth and economic development."

League of Minnesota Cities 2008 transportation policy funding statement, Nov. 27.

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State highway finance managers have seen something in recent years that they had not seen in the half-century before: year-to-year declines in receipts from the state's 20-cent-a-gallon gas tax.

Beginning in fiscal 2006, the gas tax trend line has headed in a new direction -- down. Last week's state revenue forecast projected that receipts in fiscal 2008 will lag $9 million below their 2005 peak of $651 million. It also projected slower-than-expected growth from the motor vehicle sales tax (MVST) and flat returns from vehicle license tab fees through the next four years.

The new numbers show:

•No lasting growth in the Trunk Highway Fund, which pays for roads and bridges, is expected through the rest of this decade. An infusion of federal cash will to pay for replacement of the Interstate 35W bridge. But when that money is spent, the highway fund is expected to receive $10 million less from state and federal sources in fiscal 2011 than it did in fiscal 2006.

•The only growth in state contributions to the highway fund through 2011 is forecast to come from phasing in the constitutional dedication of MVST proceeds to transportation, as approved by the voters last year.

•After the MVST phase-in is complete, Minnesota faces the prospect that its highway fund will erode -- not just relative to inflation, as it did through the 1990s, but in nominal dollars. One former state finance official described the situation this way: In a few years MnDOT may be unable to afford annual wage adjustments for its employees, let alone the rising costs of asphalt, concrete and steel.

The new numbers dash any hope state leaders may have harbored that more money would materialize for transportation improvements without any action on their part. Gone are the 1990s mobility surge (all those teen-aged kids of the baby boomers) and consumer disregard for fuel economy that kept gas tax receipts gradually rising. Those trends have given way in this decade to slower population and economic growth, less driving, and record sales for high-mileage and hybrid-fuel vehicles.

In short: If Minnesotans want easier and better commutes, more transit options and safe bridges, their elected officials have to act. Continuing the political stalemate on transportation funding guarantees the opposite outcome.

The gas tax isn't the robust revenue-raiser that it once was. But raising that user "fee" at least a nickel a gallon in the short term still makes sense (especially when accompanied by a tax-credit cushion for low-income drivers) in a multiparty strategy to prop up transportation funds. The user-fee alternative that Gov. Tim Pawlenty favors -- a mileage tax -- is still many years away from development, and likely will require federal implementation. Minnesota's ailing highway fund can't wait that long.

But though a mileage fee isn't ready, other funding supplements are. Yesterday, the St. Paul Chamber of Commerce urged that the state sales tax be reformed to generate more revenue for transportation. The League of Minnesota Cities recently expressed support for increasing the sales tax for transportation. The bonding bill that's on the Legislature's 2008 docket ought to tilt heavily toward transit projects.

And most people haven't begun to seriously confront the question raised by a changing climate as well as inadequate transportation infrastructure: How can work, school, play and home be reconfigured to reduce the daily need for motorized mobility?

The new forecast says that with each passing year, the monetary cost of doing nothing about transportation funding rises. Minnesotans should tell their elected officials that inaction carries a rising political price as well.

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