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Bumps in the road: Lawmakers finding it hard to reach consensus on plans to fund transportation

by Laura Kliewer ~ 2013 Annual Meeting Edition ~ Stateline Midwest »
This year, roughly half the nation's state legislatures considered significant changes in transportation funding — through raises in gas taxes, for example, or the use of new revenue streams.
But as of July, very few states had actually taken action, Sean Slone, a transportation specialist for The Council of State Governments, said during a session of this year's Midwestern Legislative Conference Annual Meeting. Gas taxes were raised in Vermont and Wyoming, and in Virginia, lawmakers eliminated the current gas tax while adding a wholesale fuel tax and raising sales taxes.
For the most part, though, states still appear to be in a similar position — a realization that current transportation funding does not meet the state's infrastructure needs, but a lack of legislative consensus or public support on how to close the gap.
“There is a business case to be made about the interconnectivity of infrastructure investments and how critical they are for commerce, employees and citizens,” Charles Zelle, commissioner of the Minnesota Department of Transportation, said to lawmakers who took part in the MLC's roundtable discussion.
“And we need to do a better job of telling that story, and how we keep a state competitive — not just with our neighbors — but competitive globally with other economies that are flourishing.”
In Minnesota, a recent transportation study found that over the next 20 years, the state's infrastructure needs will total $30 billion. Existing federal and state funding from gas and motor vehicle sales taxes, as well as registration fees, are expected to provide only $18 billion.
How will the state close that gap?
The Minnesota committee that conducted the study (the Minnesota Transportation Finance Advisory Committee, which Zelle helped lead) released recommendations late last year.
Its ideas centered on gradually increasing revenue from the state's existing sources for transportation projects — for example, increase revenue from motor vehicle fees by 10 percent, raise the gasoline excise tax by 40 cents per gallon over the next 20 years, and expand options for local governments to increase sales taxes.
The committee's final recommendations also suggested exploring options such as more tolling and dynamic pricing (adjusting toll rates based on levels of congestion), new public-private partnerships for certain road projects, and the monetization of state assets to raise more
Zelle suggested, too, that lawmakers seek to make their existing roadways and transportation systems operate more efficiently, thus limiting the need for more capacity. Examples of this approach include pairing roadways with transit systems and investing in technology to expand alternative ways to meter and manage lane flow.
“The arguments toward a more robust transportation system are as much about being smart about the resources we do have as well as being clear about what it takes to invest and get the performance that we all want,” he said.
Zelle said his job as DOT commissioner is to make people aware of the need for transportation investment. To that end, his department has sought and received help from the marketing departments of some of Minnesota's major companies to learn how to communicate the state’s infrastructure needs from a consumer perspective.
During the roundtable discussion, lawmakers explored a range of transportation issues, including funding options. Indiana Rep. Ed Soliday said people have an increasingly lower tolerance for user fees such as the gas tax. In the future, he said, this could mean that states have to fund a majority of their transportation needs through general-fund revenue.