Enact
Comprehensive Transportation Funding Legislation
The MICA Board
of Directors supports passage of a comprehensive transportation funding bill
that addresses the entire
Increase
Funding for Highway Systems
The MICA Board
of Directors recommends that, as a user fee, the gas tax should be increased by
at least an amount that would restore the 1988 buying power of the tax. The gas tax should also be indexed to
inflation.
The gas tax, which also covers all alternative fuels, is
the backbone of
To its credit, in 2005 the Legislature voted to phase in
a ten cent gas tax increase starting in FY2006. The 2007 Legislature voted to increase
the gas tax by 5 cents effective September 1, 2007 and authorized an additional
increase in the gas tax up to 2.5 cents to pay debt service on trunk highway
bonds. (Each penny increase in the
gas tax generates approximately $32M.)
Unfortunately, Governor Pawlenty vetoed the transportation funding packages that included these gas tax increases
in both 2005 and 2007.
A gas tax increase should be enacted by the Legislature,
not by a constitutional amendment.
Tying enactment of a gas tax to a constitutional amendment guarantees
that new gas tax revenues will be delayed at least another one and a half years,
if not undermining it completely.
The MICA Board
of Directors recommends that additional user fees such as motor vehicle
registration fees, motor vehicle sales tax, wheelage tax, vehicle mileage tax,
local option gas tax or sales tax on gasoline, local development impact fees,
assessments and parking space fees should be available to fund highways, bridges
and transit as well as to decrease reliance on the property
tax.
Traditional as well as nontraditional
transportation-related revenue sources are needed to meet road, bridge and
transit needs. Increasingly, the
burden has been shifting to property taxpayers to meet these needs.
Specific road improvements stimulated by development
should be funded by those developments.
Impact fees designed to defray these (often-unplanned) improvement costs
should be formulated and shared between affected local units of
government.
Current law allows counties in the metropolitan area to
impose a wheelage tax. However, the
law mandates that counties must reduce their transportation levy by the amount
of revenue raised by the tax. It
also limits the maximum tax to $5 per vehicle and only allows the proceeds to be
spent for highway purposes. The
wheelage tax option should be extended to all counties, and the levy offset and
the $5 cap should be repealed. The
revenues raised should be allowed to be used for both highway and transit
purposes. The 2005 Legislature
authorized counties to impose a
The MICA Board
of Directors recommends that the Legislature consider using the unrestricted
budgetary general fund balance to fund transportation
projects.
If the next budget forecast
projects a surplus, the Legislature should appropriate a portion of the surplus
funds for transportation purposes.
The 2000 Legislature took a similar action, appropriating approximately
$400 million of one time dollars for both state and county transportation
projects.
Restore
Motor Vehicle Registration Fees
The MICA Board
of Directors urges the Legislature to return motor vehicle registration fees to
pre-2000 levels and protect dedicated transportation revenues from further
reductions.
The motor vehicle registration fee is the second primary
funding source for roads and highways.
It is also a user fee; if you own a vehicle in
In 2005 and again in 2007, the Legislature removed these
caps and modified the depreciation schedule used to calculate the fee. This would have raised approximately
$150M per year when fully phased in.
However, Governor Pawlenty vetoed the transportation funding package that included this provision. Restoring motor vehicle registration
fees to their pre-2000 levels would help offset the effects of high gas prices
and more fuel efficient vehicles on overall gas tax revenues.
Current truck registration fees should be adjusted
upward in accordance with the Truck Size and Weight Study.
Reform
the
The MICA Board
of Directors recommends that new transportation funding should only be
considered in conjunction with an amended
The county highway system fulfills a vital need within
the state's transportation system.
County highways not only provide a farm-to-market link but also are an
integral component of
The current County State Aid Highway (CSAH) funding
distribution formula is based on demographic and economic conditions that
existed in
The AMC 2005 Comprehensive Transportation Funding
Proposal includes a new CSAH distribution formula for new Highway Users Tax
Distribution Fund revenues based 60% on needs and 40% on motor vehicle
registrations. This new CSAH
formula is considered by MICA to be part of a package that includes county
option wheelage fees and a half-cent regional sales tax for transportation
purposes.
The new MVST dollars that will be constitutionally
dedicated to transportation purposes over the next five years is new revenue and
should be under the new CSAH formula.
The minimum distribution provision of the current
formula only serves to exacerbate existing disparities and should be eliminated
if the AMC Comprehensive Transportation Funding Proposal is not enacted by the
legislature.
Increase
Transit Funding
The MICA Board
of Directors recommends that the Legislature provide sufficient funding to
maintain existing transit systems and provide a new funding source for expanded
transit options including capital and operation costs for light rail, commuter
rail and busways that does not have a negative impact on highway funding. MICA supports completion of the
Northstar commuter rail project; the continued development of the Cedar Avenue,
Red Rock, Rush Line, andI-35W transit corridors; planning dollars for the Robert
Street, Southwest and I-94 transit corridors; and restarting inter-city
passenger rail service between Duluth and the Twin
Cities.
Traffic congestion in
Protect
the Highway User Tax Distribution Fund
The MICA Board
of Directors opposes the use of Highway User Tax Distribution Funds for any
non-highway purposes. Programs and services that are not directly related to
paying for the cost of the state’s road and highway systems should be funded
from the State General Fund.
The Highway User Tax Distribution Fund is a
constitutionally dedicated source of stable and dependable funding for state and
local highways. Current funding
levels are barely adequate to meet maintenance demands, let alone the need for
new or substantially improved highways in growing areas of the state. The state Trunk Highway Fund presently
funds programs and services provided by several different state departments and
agencies, including Natural Resources, Public Safety and Revenue. Trunk highway dollars should be spent
only for constructing, repairing, maintaining and administering the trunk
highway system.
Exempt
Highway Equipment and Materials from the Sales Tax
The MICA Board
of Directors recommends that the Legislature exempt highway construction and
maintenance equipment and materials and its delivery from the state sales
tax.
County payment of the state sales tax on highway
construction and maintenance equipment and materials places counties in the
difficult position of either reducing the amount of resources available for
highway maintenance and improvement or increasing the burden on county property
taxpayers.
The Legislature has already exempted townships from
paying the sales tax on highway construction and maintenance equipment and
materials. In 2007, Governor
Pawlenty proposed exempting trunk highway fund projects from the sales tax. County purchases should be exempt as
well.
Provide
State Bonding Authorization for
Local
Road Improvement Program Grants
The MICA Board
of Directors recommends that the Legislature should continue to provide funding
grants for the local road improvement program rather than
loans.
The transportation funding bill that passed the 2003
Legislature provided for trunk highway bonding only for state highway
projects. Both Governor Pawlenty
and Lt. Gov./MnDOT Commissioner Molnau have acknowledged that there are
increased costs to local governments, such as interchanges, that are needed to
complete these projects. For
example, the county interchanges improvements on the Highway 52 and 63
reconstruction projects will cost
Many counties face the same funding needs for capacity
expansion, congestion reduction, interchanges, planned growth, hazard
elimination, and to match federally funded projects that the state does. The Local Road Improvement Program
should specifically allow for funding of these projects.
Counties are struggling to maintain mobility on key
regional corridors. County highways
that serve as farm-to-market corridors, connections between regional centers,
and support state investments in the trunk highway system have a significant
impact on the state economy and warrant state support.
The MICA Board
of Directors recommends that the Legislature continue to fund the state bridge
bonding program at a level sufficient to construct, replace, rehabilitate, or
renovate deficient bridges.
The state bridge bonding program is a necessary
component of funding for bridges.
Counties and other local units of government oversee 14,700 bridges – 75%
of all bridges in the state. Of
these, 1005 have been identified as structurally deficient. The state has long provided special
funding for local bridges. In
recent years, however, state funding has not kept pace with growing needs.
Additionally, counties that have experienced significant
population growth have bridges that may be structurally sound but are no longer
capable of handling increased traffic volume. These operationally deficient bridges
should be eligible for funding under the state bridge funding
program.
Bridges that are functionally obsolete or structurally
deficient and new bridges on new or existing alignment should also be eligible
for funding under this program.
Repay
Loan Advances with Interest
The MICA Board
of Directors recommends that loan advances made by local governments to MnDOT be
repaid with interest.
Currently, several counties and cities have advanced
funding to MnDOT in order to complete badly needed transportation projects. It is only fair that these local
governments be reimbursed by MnDOT not only for the original amount of the loan
advance, but also for the opportunity costs of providing the loan (i.e.
interest).
Make
No Further Changes in Eminent Domain Statute
The MICA Board
of Directors recommends the Legislature make no further changes in the eminent
domain statute beyond those already enacted.
When government officials acquire property, they are
responsible to taxpayers and property owners to acquire the property for fair
market value. Open or free market
negotiations – before condemnation has been initiated – allow government
officials to try to get the fairest deal for both taxpayers and property owners.
Once condemnation has been initiated, two levels of appeal plus reimbursement
for the cost of an independent appraisal affords sellers the opportunity to get
fairly compensated for their property if they feel they have been unable to
negotiate a fair price with the governmental unit.
Historically, eminent domain proceedings at the county
level have not been a controversial issue.
A recent MnDOT survey found that approximately 90% of county land
acquisitions were completed through negotiated settlement. The legislature should remember that
counties as well as MnDOT are affected by any changes that are made to eminent
domain statutes.
MICA had grave concerns regarding the eminent domain
legislation that the Legislature enacted in 2006. More time will be needed to ascertain
the impact of the 2006 changes to eminent domain law. Once the full effects of the law changes
have been determined, MICA will bring future concerns back to the
Legislature.
Retain
Road Turnback Funding
The MICA Board
of Directors recommends that there should be no reduction in funding for the
The Flexible Highway Account was created by the 1998
Legislature by combining monies from the 5% set aside that were previously
allocated to the Trunk Highway Fund, the County Turnback Account and the
Municipal Turnback Account. The
current 5% formula places 2.3% of the Highway User Trust Fund revenues in an
account for township roads and bridges and 2.7% of the revenues in a flexible
fund for county and municipal turnbacks.
The Legislature should ensure that there is full funding for all CSAH
turnback projects that are ready for completion.
The MICA Board of Directors further recommends that no
state road turnback to a county should occur without county approval unless the
road is constructed to design standards to meet 20-year traffic
projections. Counties that have
received former trunk highways may find themselves incapable of constructing the
highway to minimize maintenance costs and to meet the needs of the highway
users. Turnback account funds
should be available to the extent that it permits a county to reconstruct the
former trunk highway to meet the projected (20 year) needs of the traffic. (Many roads are typically designed for a
20-year lifespan, some for 35 years.)
Planned and mutually agreeable jurisdictional changes of some state
highways should continue to occur; however, counties should not be forced to
accept roads that are deficient.
The ten-year limitation on when plans have to be prepared should be
repealed.
Keep
Local Decision Making Authority on
Seasonal
Road Restrictions
The MICA Board
of Directors supports keeping the ability to make decisions regarding seasonal
road restrictions with individual road authorities.
There have been repeated attempts to expand the number
of exemptions to seasonal load restrictions in recent legislative sessions. There appears to be an incomplete
understanding about the need for seasonal load restrictions by some affected
haulers.
Springtime is a critical period for
The current liability exemption for agricultural
implements of husbandry should be repealed.
Rail-line
Abandonment
The MICA Board
of Directors recommends that proposed rail-line abandonments be reviewed to
determine their local economic impact.
Counties and regional rail authorities should be given the right of first
refusal to purchase rail-line right-of-way being
abandoned.
The loss of rail service can have significant adverse
economic consequences for some communities. Review of abandonment proposals can
identify where adverse economic impact will occur and what the impact will be if
the rail-line is abandoned.
Abandoned rail-line right-of-way can often be utilized
to accomplish a public interest.
Giving counties the right of first refusal safeguards that public
interest.
Continue
to
The MICA Board
of Directors recommends the Legislature fully fund the Board of Water and Soil
Resources (BWSR) request for wetland mitigation that impacts county highway
projects.
In 1996 the Legislature established the Local Road
Wetland Replacement Program. Under
this program, local road authorities are required to report wetlands lost due to
local government road construction.
The wetlands are then replaced by the state through BWSR. In the 2003 session, the Legislature
enacted several changes to this program, which have resulted in more cost
effective, better located, and higher quality wetlands. Without a continued state commitment to
this funding, local governments face paying for this work out of their
transportation budgets which will delay completion of local government road
projects; increase local property taxes; negate an agreement with the U.S. Army
Corps of Engineers that allows this program to meet federal regulatory
requirements; and result in another unfunded state
mandate.
Funding for wetland mitigation should continue to come
from the state’s General Fund.
However, an alternative revenue source for this program could be the
Minnesota State Lottery Environment and Natural Resources Trust
Fund.
Authorize
Plat Approval for Counties
The MICA Board
of Directors recommends that
Under current law, counties may only comment on plats
abutting county roads. Cities and
townships are free to disregard concerns and recommendations offered by the
county. This can lead to
restrictions in future design and construction options, impact the function of
the highway and can create traffic safety issues.
During the 2004 session, city and county representatives
compromised on a plat review process allowing county engineers to conduct a
review of ingress and egress, drainage, safety, rights-of-way, integration, and
impact on the county wide system prior to the city’s statutory plat review
process. This compromise alleviates
problems caused by incomplete or late submittals.
Effective right-of-way management at the county level is
essential in order to provide for future roadway needs and address safety,
congestion and environmental concerns.