Jarred into action by the tragic I-35W bridge collapse in Minneapolis in 2007, the Minnesota legislature in early 2008 proudly passed a $6.6 billion surface transportation funding bill including the state’s first gas tax hike in 20 years, plus optional sales tax hikes, a major bonding program and other measures. But 18 months later, according to its new transportation policy plan, the North Star State faces a $50 billion gap in paying for surface transportation projects over the next 20 years. Of $65 billion in needed work, only $15 billion is currently expected to be available, with three-quarters of that targeted for preserving existing roads and bridges. Officials say safety won’t be compromised. But mobility and pavement condition will. The executive summary from the report reveals (pp. 14-15) the full battery of envisioned projects are to meet system performance targets as the population grows, mainly by improving mobility in inter-regional corridors and mitigating congestion in the Twin Cities, Rochester and St. Cloud areas.
Chapter 4’s discussion of state trends affecting transportation provides more detail. Population is projected to rise 25 percent from current levels by 2035, which would be 50 percent since 1990. Congestion in the metro regions is expected to grow due to more population, a high rate of solo driving on all trips, greater commuting distances and high use of inter-regional corridors. (State highway map here). Needed projects are detailed in the accompanying statewide highway investment plan (full report here; Twin Cities district here). Given the wide funding gap between needs and resources, leaders want to encourage new ways of maintaining roads, pricing limited peak-hour highway capacity, deploying in-vehicle technology, and funding system improvements. The Minneapolis Star-Tribune reports:
Construction materials are relatively cheap now because of the recession, but that savings is not expected to last….(Minnesota Transportation Commissioner Tom) Sorel sees innovation as a big part of narrowing the gap between needs and means, from new methods of fixing pavement more cheaply and durably to ways of fitting more cars onto existing highways in the metro area. He pointed to the managed lanes being built on Interstate 35W in the southern half of the metro area and said that technology exists to allow cars to communicate with roads and one another, meaning they could travel closer together at higher speeds. He also said Minnesota is looking into studying a system under which drivers would pay a fee per mile driven rather than through the gas tax.
“We’re at a confluence of big trends — softening revenues, rapidly increasing cost of construction, an aging infrastructure, and a growing economy and population that depends on being mobile,” said Abigail McKenzie, MnDOT’s investment management director. One can quibble with the assumptions the new report makes about highway needs or future demand for driving, she said. But even if those assumptions miss the mark by 20 percent, a yawning gap between needs and resources remains. “This is a fundamental disconnect,” she said.
Coming discussions could highlight expanded possibilities for public-private partnerships to help close the funding gap. If so, the legislature may end up revisiting the prohibition in the 2008 bill (see Article 6, here) on leasing transportation infrastructure to private entities. Design-build-finance-operate-maintain (DBFOM) arrangements, or some variation thereof, can help get needed infrastructure built in a timely fashion, while the public sector retains ownership of the facility and control of toll rates, during a 30- or 40-year lease. Experts at the Washington State Transportation Commission urge a major liberalization of transpo P3 laws in this state. Texas is hip deep in transpo P3s, some funded in part by public employee pension funds. California and New York State are following close behind on transpo P3s. Now comes Massachusetts, opening the door to DBFOMs and DBOMs, thanks to the state legislature and Democratic Governor Deval Patrick. This last bit of news comes via a longtime, prominent transpo P3 advocate – David Horner, a New York-based senior counsel for international law firm Allen Overy, and former US DOT official.
Another funding tool that could get a closer look in Minnesota is the mileage-based user fee accented by state transportation chief Sorel – in large part because raising the state gas tax now yields only $30 million a year for each penny’s increase. The state last year completed a qualitative survey of the mileage fee concept with a sample group of system users, and found there is some receptivity, but – as elsewhere – that sales job won’t be without its own challenges. Some opinion leaders are beginning to sense the need for a new paradigm. The Grand Forks Herald, right across the state line, suggests in this editorial that Minnesota implement more congestion pricing on its highways and move to gradual adoption of a vehicle mileage fee.
RELATED: “West Coast States Ramp Up Joint Transpo Agenda,” Cascadia Prospectus, 7/21/09.