Archived Story
Editorial: Road funding needs innovation
Published 9:34am Friday, December 28, 2012There is probably no tougher nut to crack than that of adequate transportation funding in Minnesota, but there is also nothing more basic to economic prosperity than an efficient and safe transportation system.
So, once again, Minnesota leaders must come up with a way to fund the most critical needs first and at the same time develop a long-term funding solution. The recent report from Gov. Mark Dayton’s Transportation Finance Advisory Group suggested increasing the state gas tax, vehicle registration fees and metro area special sales taxes.
Already, Dayton is backing away from supporting increasing the gas tax, saying it doesn’t have popular or political support.
That may be true, but we can’t think of a fee or funding stream that wouldn’t affect some part of the population while many want better roads, less congestion and more safety. A gas tax is a very straightforward user fee. Those who pay it get the direct benefits from better roads.
Reports on the task force’s recommendations don’t appear to include much about road spending in Minnesota. It seems the so-called $50 billion funding gap between current revenues and needs is almost taken as a given.
Leaders need to ask hard questions about MnDOT’s current spending. Are new bike trails as critical as safe roads and bridges? Or can we encourage biking to reduce road volume? Are the standards for metro congestion appropriate? Does widening a road to reduce congestion only increase the traffic? Is there enough use of light rail and transit to justify the subsidy? Is residential growth planned with roads in mind?
The other big idea might be financing highways with bonds instead of paying as we go. Debt financing of roads can be considered long-term financing of a long-term asset. It’s the same premise we use to fund state buildings, so it’s a logical step for road funding.
Clearly, the road funding needs far exceed revenue streams right now. We have some catching up to do. But if we do it in smart ways, we’ll be able to enhance the taxpayer value of road funding dollars.
— Mankato Free Press, Dec. 19
Yes, we need to increase our funding of Roads & Bridges, yet with that said, Increasing GAS/FUEL TAXES at this time is not the method or timing to accomplish this. I applaud Gov. Dayton for his rejecting the idea of increasing the Gas Tax at this time, but then again, he did so knowing where the Political Winds were blowing.
I agree with questioning building Bike & Pedestrian Trails with Fuel Taxes. I believe Trails should be funded through another source. I also believe Transit Funding should come through General Tax Revenues, not funded through Fuel Taxes. Transit helps the general population and IMO does little to improve congestion.
Currently Gas/Fuel Taxes as stated do not have the capacity to maintain the current construction & maintenance needs. Within the current system, we keep building and funding more and more bike & pedestrian trails, more transit systems both bus, light & commuter rail highly subsidized, along with spending millions on beautification projects (beautification projects/programs consisting enhancing of bridges & retaining walls by constructing them with the look of stone, block & brick, then painting). These programs while all well, good creating wonderful looking projects, but do nothing to enhance highway capacity or reduce congestion.
With the increasing numbers of alternatively fueled vehicles each year being purchased and driven on our roads, we need to formulate a USER FEE for each and every one of those vehicles so that they pay their fair share as well as each and every Gasoline and Diesel Fueled Vehicle. This would include not only Electric Vehicles, but also include Propane and Natural Gas Powered Vehicles (of which many are Commercial Vehicles). My point of this is that every vehicle using the roadway takes up so much space, so whether driving a gas, diesel, electric, or propane fueled or some other type of vehicle, we should all be paying equally for using the roadways.
I would likely reject idea proposed idea of bonding for Highway Improvements as suggested by the Mankato Free Press for all but special projects where value engineering shows that the public would have a much greater benefit than the cost of borrowing. The idea of borrowing for Highway Improvements may get projects completed much sooner instead of waiting for the money to be available through tax collections; we would be paying much more for projects through these bonds. Example: A 1-mile new 2-lane highway costs approx. $1.5 million per lane mile = $3,000,000 for just a new 1-mile segment. Now, add the costs of bonding at 3% over 20-year we would end up paying approx. $500,000 in interest. Then start adding in maintenance costs and the fact this example project would likely need major reconstruction by the time the bonds were paid off in in 20-years. You can see from this example that you now have approx. $3,500,000 tied up in this project.
Task Force recommendations:[ {Copyright Star Tribune}
http://www.startribune.com/politics/statelocal/181635981.html?refer=y
The task force offered two options for raising the gas tax over 20 years. One would involve a 10-cent-per-gallon increase the first year, with 1.56-cent increases in each of the next 19 years.
The second option would increase the tax 3.5 cents per gallon in each of the first five years, followed by annual 1.5-cent hikes during the next 15 years.
Either way, the increase would be expected to raise an additional $15 billion for highways. A 40-cent hike would be a roughly 140 percent increase over the current per-gallon tax.
The last time the Legislature voted to increase gas taxes was in 2008.]
Minnesota Transportation Advisory Committee report
http://www.scribd.com/doc/115074992/Minnesota-Transportation-Finance-Advisory-Committee
I would propose this committee go back to work and come up with some ideas to get everybody paying their fair share and with a proposal that the tax paying public can support.