Transportation Omnibus Budget Bill

During the 2021 legislative session, the Senate DFL caucus remained committed to passing a comprehensive transportation budget that benefited all Minnesotans, whether their primary mode of transportation included single-occupancy vehicle travel, public transit, or alternative modes like walking or bicycling. The Senate DFL caucus also promoted a comprehensive funding package to address Minnesota’s long-term transportation funding shortfall and avoid money grabs from the general fund, since the transportation sector benefits from dedicated revenue sources, like the gas tax and motor vehicle sales tax.

While revenue increases proposed by the House DFL majority did not become law, the final compromise largely protected the general fund from unnecessary carve-outs for transportation. In addition, resources for multimodal transportation options were funded, including active transportation (bicycle and pedestrian infrastructure) and Safe Routes to School. Two additional bus rapid transit (BRT) routes will be added in the metro area and the final compromise avoided a zeroing out of the budget for Metro Transit. Metro Mobility, which provides trips for certified rides who are unable to use fixed-route services due to a disability or health condition, was also spared a complete elimination of its base budget as proposed by the Republican-led senate.

Overall, the transportation bill provides a positive starting point over the next two years to finance Minnesota’s transportation system, but more work will be necessary in coming sessions to address the long term-transportation needs of our state. (HF 10)

Notable items in HF 10 include:

Small cities assistance

$18 million is provided in FY 2022 to the Small Cities Assistance Program, which was created to fill the gap in state funding for cities with populations under 5,000. This General Fund assistance will provide much-needed funds for local roads and bridges in smaller communities. Municipal State Aid Streets (MSAS) and township roads qualify for constitutionally dedicated gas tax revenue, but they are defined as cities with a population over 5,000.

Bus rapid transit funding

The agreement provides significant funds ($57.5 million) for arterial bus rapid transit (BRT). Neither the House nor the Senate proposals included these additional investments in BRT. Sen. Newman indicated in Senate Finance this funding was included in exchange for no new transportation tax increases as proposed by the House DFL majority.

Eliminates license suspension for non-public safety offenses

The agreement prohibits DPS from suspending a driver’s license solely based on a driver failing to appear in court or failing to pay citations for petty misdemeanors, driving after suspension, and driving after license revocation. The intent of this provision is to allow drivers to continue to drive if they have been convicted of non-public safety related driving violations or have failed to pay parking tickets but have continued to drive.

Funding for multimodal transportation

The agreement provides $5 million for active transportation (bike/pedestrian infrastructure) and $5 million for Safe Routes to Schools. It averted the senate proposal to zero out funding for passenger rail, Northstar Commuter Rail, and Metro Transit. The agreement also provides $10 million in FY22 for a second daily Amtrak train between the Twin Cities and Chicago, which will leverage $30 million in out-of-state funds.

Transportation project earmarks

Numerous transportation projects are committed to in a letter, linked here, by MnDOT Commissioner Margaret Anderson Kelliher to be paid for through both trunk highway funds and general fund dollars. There are 14 projects in total, many of which cannot begin construction until the next biennial budget cycle. Only Highway 212 is mentioned specifically in the omnibus bill.

General fund projects

  • US Highway 8 in Chisago County
  • 99th Avenue and TH 65 in Blaine 
  • US 169, TH 282, & CSAH 9 in Scott County
  • Sherburn street and utility reconstruction
  • Washington County bridge over I-694
  • TH 41 Chanhassen roundabout
  • I-35 in Dakota County study 
  • Trunk Highways 3, 77, and 55 studies
  • US 10 in St. Cloud study
  • I-35 and CSAH 9 in Rice County study  

Trunk highway projects:

  • Ramsey Gateway/Highway 10 in Anoka County
  • US 10 in Wadena
  • US 212 in Carver County
  • I-94 Westbound in Albertville

All Department of Public Safety drivers testing sites to remain open

The transportation agreement requires all driver exam stations that closed in 2020 due to the COVID-19 pandemic to remain open through the next biennium. DPS had initially intended to only re-open approximately 30 exam stations to increase the operational efficiencies of administering road tests and avoid the need for examiners to travel to satellite sites. Since approximately 30 exam stations have reopened, DVS has been able to eliminate the backlog in road tests that was exacerbated by the closure of stations due to the pandemic. An Office of the Legislative Auditor report from last session evaluated the former backlog in road tests and determined that there may not be a need for all 93 exam stations to be reopened. The concern with applicants having to travel long distances for a road test has apparently overshadowed this OLA assessment. A one-time, $5.1 million appropriation next biennium to DVS is provided to reopen all exam stations.

Capitol Security funding increase

In addition to a $2 million operating adjustment to Capitol Security, $13 million is appropriated from the general fund in the next biennium for Capitol Security enhancements, which includes funding for 21 additional sworn Capitol Security officers and 10 non-sworn officers. Additional funding is also provided for body worn cameras for Capitol Security.

Other initiatives from the transportation omnibus included in the final agreement:

  • Bus Rapid Transit feasibility study for Hwy 55
  • Planning for zero-emissions from through the Met Council
  • Funding for a second Amtrak train to Chicago
  • Met Council provided regional transit bond authorized to fund replacement and refurbishment of transit shelters, buses, etc.)
  • “Fix it first” language to prioritize road repairs over freeway and highway expansions
  • Two additional freight rail inspectors funded
  • Grants for freight rail improvements
  • Hazardous materials transportation preparedness language
  • Drivers licenses reinstatement fees no longer doubled or tripled up
  • Funds for local roads and bridges, small cities roads, township roads (which takes pressure off of local property taxes)
  • More funding for State Patrol troopers and funding for State Patrol body cameras
  • Funding for a pilot program for same day drivers’ license issuance
  • Funding for a pilot program for self-service license tab kiosks
  • Funding for school bus stop arm cameras

Trunk highway/general fund shifts

The senate transportation proposal would have shifted $86 million in biennial spending from the Highway User Tax Distribution Fund (HUTDF) and Trunk Highway Fund (THF). These shifts of obligations onto the general fund would have siphoned resources away from other non-transportation related budget areas that do not have dedicated revenue sources like transportation. (SF 1159)

Auto parts sale tax diversion

The special session transportation agreement excludes the senate’s proposal to alter the distribution of general sales tax on vehicle repair and replacement parts away from the general fund to the Highway User Tax Distribution Fund (HUTDF) through a percentage rather than a flat dollar amount. The proposal would have siphoned $74.9 million next biennium and $107.5 million in the tails in revenue away from the general fund to transportation expenses. Under current law, a specific dollar amount ($12.1 million) of total sales tax revenue is deposited monthly into the HUTDF and the remainder of the revenue goes to the general fund. This proposal would have put further pressure on the general fund to provide resources for transportation needs instead of other budget areas and the House refused to accept this proposal. (SF 625)

House DFL sustainable transportation funding proposals

The DFL House majority proposed numerous increases to transportation revenue, including an indexing of the gas tax, restructuring of license tab fees, an increase to the Motor Vehicle Sales Tax (MVST)—(to bring it into parity with the overall state sales tax), and an increase to the metro area sales tax for transit. These revenue increases would have begun to address the long-term structural shortfall in transportation revenue that is necessary to ensure we have the capacity to maintain as well as expand our transportation infrastructure to meet the needs of all Minnesotans. These revenue raisers were not part of the global agreement and did not become law. (HF 1684)

Elimination of Metro Transit and Metro Mobility base funding

The final agreement averted a senate proposal to eliminate base funding for the Met Council budget for Metro Transit and Metro Mobility for the next three years. The cut to Metro Transit’s budget would have been $32.6 million and $55.9 million to Metro Mobility over the next three years. The Met Council is provided $235 million in FY 22-23, with a significant $57 million investment in BRT. Nevertheless, an $80 million structural budget deficit for Metro Transit still exists and one-time federal funds will only delay this budget crisis. Metro Transit and Metro Mobility need sustainable General Fund resources to continue to provide the services Minnesotans expect and our regional economic vitality depends upon. (SF 1159)

Drivers’ Licenses for All

The Legislature failed to pass legislation to allow undocumented Minnesotans to acquire a state driver’s license and car insurance. The policy, passed previously in a DFL-controlled Senate and years later by a DFL-controlled House, was rejected by the Republican-controlled senate majority. 

The inability to obtain a drivers’ license results in undocumented Minnesotans being unable to access essential destinations, and includes risking jail, deportation, or separation from loved ones. The importance of this legislation was exacerbated by the pandemic; more than two thirds of undocumented immigrants in Minnesota are essential workers who have been forced to continue attending their jobs. Support for drivers’ licenses for all has been expressed by many organizations across different fields, including the Minnesota Catholic Church, law enforcement, and the Minnesota Chamber of Commerce. (SF 399)

Third party drivers’ license testing

Legislation to allow private driving schools to administer Class D driver tests, which raised significant safety concerns, did not pass. Minnesota ranks as the fifth lowest state for teen driver deaths per 10,000 licenses for drivers of the age of 19 or younger. None of the five states with the lowest crash fatalities per 100 million miles use third parties for Class D skill tests. The Department of Public Safety Driver and Vehicle Services has a public interest in maintaining safety on Minnesota’s public roadways and does not support this legislation.

Transferring authority to for-profit entities would have created a conflict of interest for these schools by allowing them to pass drivers that may not be ready to drive on public roadways. Deferring public safety to private entities is not the solution we need to ensure driver’s license applicants receive timely and comprehensive road exams and that Minnesota drivers are adequately trained to maintain safety on our roadways. (SF 276)

Electric vehicle tax increase

A Republican-led bill to triple the surcharge currently paid by all-electric vehicle (EV) owners for registration renewal, did not pass this session. The proposal would have increased the annual fee from $75 per year to $229. It also would have imposed a new $114.50 registration surcharge on hybrid vehicles.

An EV vehicle registration surcharge was imposed in January 2018 to require electric vehicle owners to contribute to road maintenance, since these vehicles are not paying the gas tax that funds road infrastructure. Since EVs don’t pay a gas tax, there may be some justification in requiring drivers to help pay for a portion of road maintenance expenses. However, more than tripling the surcharge punishes drivers for owning an electric vehicle and ignores their contributions to lowering greenhouse gas emissions. (SF 1086)

Prohibitions on funding for bike infrastructure

The final agreement did not include controversial language that would have prohibited trunk highway funds from being used for bicycle infrastructure, including changes that would have prohibited the conversion of car lanes to bike lanes. This proposal would have circumvented ‘complete street’ guidelines that encourage the development of multimodal transportation options throughout the state. It would have resulted in a more dangerous environment for bikers and an inconvenience for cars when cyclists are forced to use an entire lane because no shoulder or bike lane is available. The proposal would have made it more difficult for MnDOT to maximize public use of roadways for all commuters and would have resulted in more car-centric roadway planning and maintenance. More people biking on a road, rather than driving, increase the road’s lifespan and saves money in the long term. Also, multimodal transportation is essential in combating climate change, since transportation is the largest contributor to Minnesota’s greenhouse gas emissions. These limits on bicycle infrastructure also would have taken away local control and prevented communities from making reconstruction decisions that best meet the transportation needs of their neighborhoods. (SF 1159)