Guest Column by Scott Brener

We agree with Gov. Mark Dayton: Let’s get real about transportation. Minnesotans demand safe and efficient movement of people and goods. Our existing dedicated revenues fall short of maintaining our system of roads, bridges and transit, let alone allowing for strategic expansion.

The Legislature should pass a 10-year plan funded by efficient use of current resources, general fund appropriations and value capture mechanisms.

The first reality check, however, is to agree on how much we need to invest. What are the real numbers?

In 2012, the Transportation Finance Advisory Committee projected we needed $250 million per year to “maintain” our state roads and bridges. Today, Gov. Dayton says we need $400 million.

In 2012, TFAC projected we needed $210 million per year to build out the Twin Cities transit system. Today, Gov. Dayton says we need $280 million.

In 2012, TFAC  projected that the metro area transit system could be  built out in the next 20 years — only if we increased the metro area sales tax by a half-cent. Today, planning documents from the Counties Transit Improvement Board and the Metropolitan Council project that the expansion can be completed with current revenues in the next 10 years.

Once we agree on the priorities, we do need to get real about funding. Solutions advanced by the governor and transportation special-interests are well meaning but sorely outdated.

Gas-tax revenues are declining in value with more efficient and electric cars. Current user fees — fuel taxes, vehicle registration fees and the motor vehicle sales tax — do not capture any money from those who use the system but will never buy or operate a vehicle.

The proposed new gross receipts tax on gas — assessing the 6.5-percent sales tax at the wholesale level — is not transparent to consumers. The assessment will wind up in significantly higher prices at the pump. And projected revenues are far from stable. At $2 per-gallon gas prices, the tax would increase the cost at the pump by about 12 cents. At $4, it’s more than 25 cents. The governor’s current proposal is based on gas at $3.25 per gallon.

We must invest in a way that does not make our cost of doing business any less competitive than it is today. Minnesota last increased its gas tax in July 2012. We also raised significant sales, income and corporate taxes to the tune of $2.1 billion less than two years ago.

Someone must ask: Are other government services any less long term and in need of stable funding than transportation? If the answer is “no,” then why is it appropriate to fund, say, health care services with those dollars but not transportation? Thirty-three states use the general fund to supplement financing for state roads and bridges. This also could force everyone to redouble efforts to redesign the delivery of all state programs and services.

We should be exploring new funding mechanisms like value capture, too. Large public investments in transportation infrastructure — such as new freeway interchanges, highways or transit lines — can increase the value of adjacent private land, sometimes substantially. Research at the University of Minnesota’s Center for Transportation Studies shows that assessing a portion of a project’s cost against those who most directly benefit can contribute significant dollars.

Business owners and managers usually identify education, public safety and transportation as the most important state services. Yet, outside of small annual appropriations for transit, transportation does not show up on the balance sheet of the general fund.

The Minnesota Chamber supports a new 10-year investment plan — that’s 2016 to 2026, not 1966 to 1976.  First, let’s have a meaningful conversation to reach consensus about what we need to invest. Second, let’s get practical — and creative — about how to fund it. Our goal is a transportation system that facilitates a changing and growing economy. We need an investment and funding strategy that’s up to this task.

 

Scott Brener, senior vice president and general counsel at SFM, Bloomington, is chair of the Minnesota Chamber’s Transportation Policy Committee.