Dolan Media Newswire Story
Subject: Audit finds Minnesota highway and bridge funding is ‘downright grim’
Pub: Finance and Commerce
Author: Charley Shaw
Category: Government,Transportation,Construction/Architecture,Justice
Sub-Category: State Government,Legislative
Issue Date: 02/21/2008 Word Count: 33
Audit finds Minnesota highway and bridge funding is ‘downright grim’
by Charley Shaw
Dolan Media Newswires
© Dolan Media Newswires 2010.MINNEAPOLIS, MN -- A new report from the Legislative Auditor about the Minnesota Department of Transportation’s financial problems gave a boost to DFLers as they try to pass a transportation funding bill this week.
Financial projections in the auditor’s report, which was requested by legislators after the deadly collapse of the 35W bridge in Minneapolis on Aug. 1, show that MnDOT’s future state and federal funding will barely keep pace with its future needs to preserve existing roads and bridges.
MnDOT has also seen the condition of its trunk highways deteriorate since 2002, the report said.
“There are a few bright spots. But the overall picture is not good and parts are downright grim,” Legislative Auditor James Nobles said Tuesday during a Legislative Audit Commission hearing.
The House and Senate are expected to vote today on a 10-year, $7.8 billion transportation funding bill that increases the state’s 20-cent-per-gallon tax on gasoline by as much as 8.5 cents and adds a half-cent sales tax increase for transit in the metropolitan area.
The House and Senate versions of the bill are expected to pass, but the bill that goes to the governor’s desk faces a likely veto from GOP Gov. Tim Pawlenty. The DFL will try to override the expected veto by maintaining its veto-proof majority in the Senate and gaining the five GOP votes it would need in the House.
“This report adds momentum to these two (House and Senate) bills as they move forward,” said House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, during a news conference after the report was released.
The auditor’s report analyzed the state’s trunk highway system, which includes 11,000 miles of roads and 4,500 bridges and culverts.
The report found that revenues for the trunk highway system like motor vehicle and fuel taxes have declined significantly this decade. In 2007, those revenue sources amounted to half of trunk highway funding, down from three quarters of its funding in 1998. The state, without adjusting for inflation, received $1.29 billion in 2007 from the state motor vehicle and gas tax, down from $1.32 billion in 2003. In 2006, voters approved a constitutional amendment that dedicates all of the motor vehicle sales tax (MVST) to transportation. The MVST amendment should result in a modest increase in revenues up to $1.46 billion in 2011.
The revenue declines have occurred for several reasons, Nobles said. Factors include increased fuel prices that have caused drivers to use less gas, according to the report.
Since 2003, MnDOT has relied heavily on debt to fund projects. In 2000, for the first time since 1983, state lawmakers issued trunk highway bonds.
Gov. Jesse Ventura’s Moving Minnesota initiative borrowed $100 million in 2000 and Gov. Tim Pawlenty’s Bond Accelerated Program borrowed $400 million in 2003. Those two major bonding initiatives are part of the reason MnDOT put more resources into expansion projects rather than preservation earlier this decade, the report said. As a result, resurfacing projects declined as a percentage of total investments to 4 percent in 2003 from 35 percent in 2001.
The report also found MnDOT consistently includes more projects in the trunk highway program that it can deliver. The agency has “ill defined scopes and underestimated project costs,” the report said.
A recent study from the St. Paul economic think tank Growth & Justice found that if Minnesota had continued to spend what it was spending on highways in 1986, by the end of 2006 the state would have spent $13.9 billion more than it did during that 20-year period.
Transportation Commissioner Carol Molnau, who is also Pawlenty’s lieutenant governor, said the report provides “accurate information and helpful recommendations.” She noted gas tax revenues are expected to decline in the future. She said state policymakers will need to “find another major source of funding transportation outside of the gas tax.”
MnDOT’s estimates show it will need $672 million a year from 2012 to 2018 for preservation of highways, bridges and culverts. Estimates show MnDOT’s trunk highway construction budget will receive $635 million in anticipated state and federal revenues. That leaves little room for expansion, according to Nobles.
“What to do to fund expansion will be the question,” Nobles said.
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