1. County Transportation System Governor’s Transportation Advisory Committee September 14, 2012 Abbey Bryduck, AMC Policy Analyst

2. Minnesota Roadways Comparison of System Miles and Traffic Volume-2006 Total Local Share 120,629 miles 89.1% 40.7% VMT Total County Share 45,000 miles 33.5% 24.7% VMT Source: Mn/DOT Traffic Data and Analysis SystemMilesPercentVMT US Interstates, & Us and MN Trunk Highways 11,8708.8%59.2% County State Aid Highways30,51422.6%22.8% County Roads14,48310.8%1.9% Municipal State Aid Roads – Large Cities 3,0692.3%7.8% City Streets – Large and Small Cities 16,03611.9%6.3% Townships56,25741.5%2.0% Other2,9172.1%<.01% Total135,416100%

3. County System: County State Aid System (CSAH) County State Aid System (CSAH) – 30,600 miles of roadway - 67% of total county mileage County Roads County Roads – 14,500 miles of roadway, 33% of mileage

4. County State Aid System (CSAH) Main Revenue Sources License Tab Fees License Tab Fees Vehicles Sales Tax (MVST) Vehicles Sales Tax (MVST) Gas Tax Gas Tax

5. Distribution of Funds CSAH Distribution of Funds Apportionment Formula– “old money” 10% equal to all counties 10% equal to all counties 10% proportional based on vehicle registration 10% proportional based on vehicle registration 30% based on county lane miles 30% based on county lane miles 50% county construction needs 50% county construction needs

6. CSAH Distribution of Funds Excess Formula– “new” money from 2008 bill 40% vehicle registrations 40% vehicle registrations 60% needs 60% needs

7. County Roads Revenue Source Property Taxes Property Taxes Assessments Assessments

8. Historical Context Local roads and bridges were initially funded with property taxes and assessments, which were perceived as inequitable. Local roads and bridges were initially funded with property taxes and assessments, which were perceived as inequitable. Local Road Systems formed in 1956 with a constitutional amendment, establishing the Local Road Systems formed in 1956 with a constitutional amendment, establishing the 62% (Trunk Highway) 29% (CSAH) 9% (Municipal) distribution of highway user revenue. distribution of highway user revenue. This would begin the gradual transition to taxes levied against ownership and use of motor vehicles instead of property taxes. This would begin the gradual transition to taxes levied against ownership and use of motor vehicles instead of property taxes.

9. System Stresses Traffic Growth Traffic Growth Greater level of heavy commercial traffic Greater level of heavy commercial traffic Heavier trucks Heavier trucks

10. Key Challenges to the County System Inflation of costs of materials Inflation of costs of materials Increased maintenance and needs due to aging infrastructure Increased maintenance and needs due to aging infrastructure Aging population presenting additional safety and mobility concerns Aging population presenting additional safety and mobility concerns

12. Annual CSAH Unmet Construction Needs Annual Unmet% Construction CSAHUnmet NeedsAllocationNeeds 1998$259,325,597$175,484,710$83,840,88732.3% 1999$279,568,555$185,649,698$93,918,85733.6% 2000$282,186,458$196,009,829$86,176,62930.5% 2001$294,906,411$204,136,037$90,770,37430.8% 2002$305,978,605$212,775,730$93,202,87530.5% 2003$321,389,994$200,534,226$120,855,76837.6% 2004$347,626,686$214,235,060$133,391,62638.4% 2005$364,718,533$214,242,904$150,475,62941.3% 2006$387,233,574$212,846,929$174,386,64545.0% 2007$427,542,352$215,700,279$211,842,07349.5% 2008$479,824,306$217,455,379$262,368,92754.7% 2009$486,733,110$229,236,941$257,496,16952.9% 2010$519,263,941$243,585,211$275,678,73053.1% 2011$536,902,096$264,018,492$272,883,60450.8% 2012$551,001,578$281,152,293$269,849,28549.0% Annual CSAH Unmet Construction Needs Source: Mn/DOT County State Aid Annual Unmet% Construction CSAHUnmet NeedsAllocationNeeds 1998$259,325,597$175,484,710$83,840,88732.3% 1999$279,568,555$185,649,698$93,918,85733.6% 2000$282,186,458$196,009,829$86,176,62930.5% 2001$294,906,411$204,136,037$90,770,37430.8% 2002$305,978,605$212,775,730$93,202,87530.5% 2003$321,389,994$200,534,226$120,855,76837.6% 2004$347,626,686$214,235,060$133,391,62638.4% 2005$364,718,533$214,242,904$150,475,62941.3% 2006$387,233,574$212,846,929$174,386,64545.0% 2007$427,542,352$215,700,279$211,842,07349.5% 2008$479,824,306$217,455,379$262,368,92754.7% 2009$486,733,110$229,236,941$257,496,16952.9% 2010$519,263,941$243,585,211$275,678,73053.1% 2011$536,902,096$264,018,492$272,883,60450.8% 2012$551,001,578$281,152,293$269,849,28549.0%

14. Local Response to Challenges Local property tax levies applied to road and bridge construction and maintenance have increased steadily Local property tax levies applied to road and bridge construction and maintenance have increased steadily Increased dependence on borrowing as a finance strategy Increased dependence on borrowing as a finance strategy Deferred projects and maintenance Deferred projects and maintenance

15. State Response to Challenges - Bonding Addition of the Local Road Improvement Program Addition of the Local Road Improvement Program – Last year $10M Local Bridge Bonding Local Bridge Bonding – Last year $30M

16. State Response – Chapter 152 Gas Tax Increase – 8.5 cents Gas Tax Increase – 8.5 cents Tab Fee Increase – removed cap Tab Fee Increase – removed cap MVST 60%/40% split roads/transit MVST 60%/40% split roads/transit Constitutionally Dedicated

17. Solution – Leverage Constitutionally Dedicated Streams Increase State Aid and other targeted state funding Increase State Aid and other targeted state funding Authorize additional local revenue generating authority Authorize additional local revenue generating authority – Wheelage fee – Local option sales taxes without referendum requirement

18. Counties and Transit Two authorities: Regional Rail Authority Regional Rail Authority County Transportation Improvement Board (CTIB) County Transportation Improvement Board (CTIB)

19. County Transit Improvement Board (CTIB) In 2008, the 5 metro counties of Anoka, Dakota, Hennepin, Ramsey and Washington imposed a 1/4 cent sales tax for the purpose of expanding the transitway system. (Light rail, commuter rail and BRT.) In 2008, the 5 metro counties of Anoka, Dakota, Hennepin, Ramsey and Washington imposed a 1/4 cent sales tax for the purpose of expanding the transitway system. (Light rail, commuter rail and BRT.) The tax generates about $100M/year. Since 2008, CTIB has distributed $467M in grants. The tax generates about $100M/year. Since 2008, CTIB has distributed $467M in grants. With grants to be awarded this fall, CTIB will have committed about half a billion dollars to transitways With grants to be awarded this fall, CTIB will have committed about half a billion dollars to transitways.

20. Regional Rail Authorities (RRA) Authority to levy property taxes and contribute 10% of the total capital cost of transitways. (Note: prior to CTIB and the sales tax, this percentage was even higher.) Authority to levy property taxes and contribute 10% of the total capital cost of transitways. (Note: prior to CTIB and the sales tax, this percentage was even higher.) RRA's also pay the costs of feasibility studies, alternatives analyses, and early environmental work. These upfront expenditures are significant. For example, Hennepin has expended in excess of $25M for the SWLRT project for the pre-preliminary engineering work. RRA's also pay the costs of feasibility studies, alternatives analyses, and early environmental work. These upfront expenditures are significant. For example, Hennepin has expended in excess of $25M for the SWLRT project for the pre-preliminary engineering work.

21. NOTE: If the region (CTIB and the Met Council) decides to accelerate the development of the "economically competitive" transit way system, the 10% RRA capital contribution will be a very significant property tax burden. This will be a financial concern going forward.

22. Abbey Bryduck AMC Transportation Policy Analyst Abryduck@mncounties.org 651 789 4339