Senator John Hoffman: Minnesota is facing a transportation funding gap
Minnesota is facing a $6 billion statewide transportation funding gap. Unfortunately, the legislature hasn’t been able to pass a viable long-term transportation funding plan to address this growing deficit. To make matters worse, if we don’t find a solution, more than 70 percent of currently projected future spending will need to go toward road preservation rather than improving our infrastructure.
Right now, more than half of Minnesota’s roads are more than 50 years old, and 40 percent of the state’s bridges are more than 40 years old. In just the next three years alone, one in five Minnesota roads will pass their useful life. And in the next ten years, nearly 40 percent of our roads will be past their useful life.
Poor roads cost Minnesota motorists $1.2 billion every year in extra vehicle repairs, and Minnesota businesses spend an extra $232 million each year on additional freight transportation costs caused by traffic congestion. In addition, the average Minnesota commuter wastes 34 hours stuck in traffic every year. If no additional investments are made in our transportation systems, by 2025 the average Minnesota commuter will waste an estimated 45 hours stuck in traffic.
So, how do we currently pay for transportation? It’s a complicated system, but in Minnesota, “user fees” provide most of the money for highways but not for local roads. The state gas tax provides 28 percent of highway funding, license tab fees cover 23 percent, motor vehicle sales taxes account for 14 percent, federal aid supplies 24 percent, money borrowed by selling bonds provides 7 percent, and other highway revenues account for 3 percent.
The Minnesota Constitution dedicates the user fees generated by gas taxes, tab fees, and motor vehicle sales taxes “solely for highway purposes.” That money can’t be used for public transit. Additionally, most city, county, and township roads are financed with local taxes, mainly property taxes. State aid helps pay for some of the bigger city streets and county highways.
There are no easy solutions. Nobody wants to pay more for gas, but our current gas tax hasn’t kept up with inflation. I’m not calling for a gas tax increase, but we have to look at all options to solve this very real problem. Minnesota’s gas tax is currently 28.5 cents per gallon, which is almost exactly the national average. Minnesotans pay 47 cents per gallon in state and federal taxes combined, according to the U.S. Energy Information Administration.
The last time Minnesota raised its gas tax was in 2008, which was a year after the Interstate 35W bridge in Minneapolis collapsed. That year, the legislature passed a plan to raise the gas tax from 20 cents a gallon to the current 28.6 cents. In 1975, Minnesota’s gas tax was 9 cents per gallon. If that were adjusted for inflation, Minnesota would have a gas tax of about 42 cents per gallon today. Our gas tax revenue is expected to fall even more as motor vehicles become more fuel efficient. Experts predict that by 2040 more than half of all new car sales will be electric.
In our own backyard, I’ve introduced several bills to address road improvements with bonding funds. One is to appropriate $30 million in Trunk Highway bonds to construct additional lanes on U.S. Hwy. 10. Specifically, the funds will add a third lane on both sides of the highway from Hanson Blvd. in Coon Rapids to 7th Avenue in Anoka. The second bill I’ve introduced also asks for $30 million in bonding to add a third lane to both directions on Hwy. 10, from Hanson Blvd. to Round Lake Blvd. in Coon Rapids. These bonding proposals will accelerate funds to fix the high congestion and safety concerns along this corridor of Hwy. 10.
Last year, a bill was introduced to create a fee structure for electric vehicles that share our roads. This idea isn’t new. State governments across the country are seeking to add fees to electric vehicles to help these drivers pay their fair share of road maintenance costs. This could offset some of the missing gas tax money from drivers but certainly would not be enough to address our ongoing funding deficit.
Another option could be investing more in our Corridors of Commerce program. This program was created in 2013 and authorized the sale of up to $300 million in new trunk highway bonds for the construction, reconstruction, and improvement of trunk highways for projects not already in the state’s improvement program. We’ve continued to provide funds for this program, but unfortunately it will not solve the actual problem of our long-term transportation funding deficit.
We could also dedicate a portion of the existing sales tax on auto parts to transportation. By dedicating a portion of the existing sales tax on auto parts and other vehicle-related services solely to transportation, we could provide some funding for roads and bridges. But again, it just isn’t enough to solve our transportation deficit today and in the future.
Finally, there is a proposal to spend more of the state’s income and sales tax revenues on transportation, but this solution would take money away from education, health and human services, and other programs financed through the state’s general fund. In an era of tight budgets and increased needs, I’d hate to see money taken from other important programs that serve our communities.
However, I think we need to put all ideas on the table and have an honest discussion to come up with a viable solution. The longer we wait to address this problem, the larger the deficit grows, and the more difficult it will be to catch up. I’m a huge advocate of finding common ground with commonsense solutions to problems. I just hope we can actually make some headway this year with this difficult and growing problem.
To contact me with your ideas and feedback, you can reach me by phone at 651-296-4154 or by email at email@example.com. You can also mail letters or pay me a visit in the Minnesota Senate Building, Room 2231, right across the street from the Capitol.
This column was first published in the Hometown Source.