Minnesota Governor Unveils Ambitious Transportation Funding Plan

The transportation community in Minnesota is giving an early thumbs-up to Governor Tim Walz’ plan to allocate new funding to roads, bridges, and transit over the next two years.

The increases are part of a $49.5 Billion budget for 2020-21 that Walz unveiled in mid-February.

“The proposal includes a 20-cent increase in the gas tax, currently 28.5 cents per gallon, which would raise about $6.5 billion over 10 years,” Finance & Commerce reports. The increase would be phased in over two years and be indexed to inflation starting in 2023. The state would raise another $4 billion by increasing the registration tax and changing the depreciation schedule, and collect a further $505 million by increasing the motor vehicle sales tax from 6.5 to 6.875%.”

A fact sheet from Walz’ office said the plan would increase state funding for city and county roads and bridges by up to 35%.

Addressing the Funding Gap

“We’re definitely pleased [Walz] understands the magnitude of the problem and that it will take a significant increase in revenue to meet the funding gap, because things have fallen significantly behind in Minnesota,” said Minnesota Transportation Alliance Executive Director Margaret Donahoe.

“It’s one of the biggest programs we’ve seen in a long time,” added Minnesota Asphalt Paving Association Executive Director Abbey Bryduck. “For us, this is a really solid, solid package.”

While some of the announced increase actually consists of reallocations within the state’s general fund, Bryduck stressed that the dollars would be “constitutionally dedicated to transportation rather than at the whim of future legislators.”

In its 2017 Report Card on America’s Infrastructure, the American Society of Civil Engineers gave Minnesota a D+ grade for its roads and a C for its bridges. “The Minnesota State Highway Investment Plan (MnSHIP), published in 2017, estimates that state roads are underfunded by $17.7 billion over the next 20 years, an annual funding gap of $885 million,” the report card stated. “Without significant public investment, our roads and bridges will continue to fall into disrepair.”

The report card also points to a $2.18-billion annual funding shortfall for the state’s bridges and cites traffic congestion as a growing problem across both classes of surface transportation infrastructure.

No doubt Governor Walz is well aware of this report and the state’s role to promptly address its critical infrastructure needs.

When it comes to funding tomorrow’s highway solutions today, state governments are on the move. Learn more at IBTTA’s Summit on Finance & Policy, May 19-21 in Philadelphia.