Transportation: Long-Term Funding & Program Efficiency
Issue
How should we fund our transportation infrastructure and transit operations to assure the safest, most cost-effective transportation system that will meet the economic and quality of life needs of our state?
Policy
The Minnesota Chamber has been and will continue to be committed to a reasonable increase in funding for Minnesota’s transportation infrastructure while at the same time recognizing the impact of higher taxes and fees on Minnesota businesses.
The Minnesota Chamber supports the following:
- A 5-cent fuel tax increase – $160 million per year.
- Up to an additional 2.5-cent fuel tax increase to finance debt service on trunk highway bonds – $80 million to finance debt service.
- Trunk highway bonding to accelerate projects throughout the state – at least $500 million in bonds.
- A change in the vehicle tab fee depreciation schedule on vehicles purchased following enactment – approximately $115 million per year.
- General obligation bonding to fund bridge improvements.
- Transit funding to support the capital and operating costs associated with the Metropolitan Council’s 2020 goal (including Central Corridor light rail transit and Bottineau, Cedar Avenue, and I-35W bus rapid transit) and the Southwest light rail transit line at a cost not to exceed $100 million per year. This could be accomplished by the following:
- Capturing increased property value and/or sales tax revenue due to transit improvements.
- Fare box recovery from light rail transit lines, express bus, and bus rapid transit to support at least 50 percent of the operating costs of the lines.
- General obligation bonding to fund transit capital improvements.
- We oppose the increase and dedication of Minnesota’s sales tax but, if a metro sales tax increase is necessary to fund a portion of the $100 million per year cost between 2009 and 2020 associated with the Metropolitan Council’s 2020 goal and the Southwest light rail transit line, it should:
- Be the lowest rate possible in order to achieve funding the Met Council 2020 goal and Southwest light rail line (not to exceed $100 million per year).
- Not require or create any new bureaucracies. Transit in the metro area should continue to be governed by our existing regional planning organization, the Metropolitan Council.
- Subject to voter approval as provided for in existing state law.
- Be in conjunction with a reduction in business inputs that are subject to the sales tax and include a vendors’ collection allowance.
- Require continued investment by local government in the capital costs relating to rail projects.
- Sunset in 2020.
- Congestion pricing on new capacity and/or existing HOV lanes to relieve congestion, and increase highway safety (MnPass).
- Dedication of the Motor Vehicle Sales Tax on Leased Vehicles to roads and transit – $45M per year.
- Identify and implement efficiencies to ensure we are getting the most for our road, bridge and transit dollars. Examples include reviewing the current bidding process and implementing more efficient purchasing practices that will increase the value received for each dollar.
- Technical changes that will help businesses move products more efficiently.
The Minnesota Chamber opposes the following:
- Transportation revenues that create a competitive disadvantage for businesses in different communities such as wheelage taxes and transportation utility fees.
- “Leakages” from the trunk highway fund for nonhighway purposes such as Minnesota Department of Transportation (MnDOT) buildings. No trunk highway fund revenue should be used for nonhighway purposes, as directed by the State Constitution.
- Tolling or privatization of Minnesota’s existing general purpose lanes.
Business Impact
Businesses rely on the transportation system to move freight efficiently and to get employees to work in a timely and safe manner. Growing congestion in the Twin Cities as well as safety issues on Greater Minnesota roads has created a significant problem for Minnesota businesses. Both the Business Barometer Poll and the Minnesota Chamber Member Poll show an increasing number of companies believe that transportation is a major issue and believe that the declining transportation system is hurting their business. Business cannot afford to have products or workers stuck in traffic. The state’s economy is dependent upon our ability to move people and goods; thus transportation investments have a direct impact on the state’s economic well-being.
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