Minnesota faces a 45% drop in highway spending by fiscal 2018 as transportation revenues fail to keep up.

DALLAS -- A projected decline in transportation revenues that is expected to cut Minnesota’s bridge and highway funding by 45% in fiscal 2018 would cripple repair efforts and severely curtail state road system expansion plans, state officials said.

“Our needs are outpacing our revenue projections,” Charles Zelle, Commissioner of the Minnesota Department of Transportation, said at a news conference Thursday. “It’s all in the arithmetic.”

A long-term vision for Minnesota’s transportation system is needed, Zelle said in an effort to gain support for Gov. Mark Dayton’s transportation plan, which would pump an additional $6 billion in highway and transit projects over the next 10 years.

“If we don’t increase the revenue, we cannot plan for good, capital investments,” he said. “Our system will continue to degrade and not provide the necessary support our economy needs.”

More than half of the state’s roads are more than 50 years old, and 40% of the bridges are more than 40 years old, Zelle said.

More than 40% of Minnesota’s roads will be past their useful service life within the next 10 years unless more funding is available, he said.

The Minnesota DOT released a report last year that said the state is facing a $16.3 billion transportation shortfall through 2035, up from a 2013 projection of a $12.5 billion revenue gap. Factors in the shortfall include inflation, aging infrastructure, and legislative inaction, Zelle said.

“Minnesota’s infrastructure will continue to deteriorate without a significant infusion of resources to address critical needs,” he said. “There is strong, bipartisan agreement that something must be done to improve transportation funding. It’s up to the Legislature to determine that solution, and soon.”

Funding for highway projects has declined from $1.1 billion in 2014 and $1 billion last year, Zelle said.

Lt. Gov. Tina Smith said the $930 million, 246-project highway construction effort for 2016 includes 44 fewer projects than last year.

Smith urged lawmakers to adopt Dayton’s transportation funding proposal.

 “We need a comprehensive, dedicated, long-term, and balanced funding plan for transportation,” Smith said. “Our plan would provide the resources we need to create a 21st Century transportation system and build an economy that works for all Minnesotans.”

Smith said the governor’s program would repair or replace 2,200 miles of roads and 330 bridges statewide.

“If we don’t pass a funding plan, the needs won’t go away,” she said. “The projects will just get more expensive.

Dayton’s proposal (Senate File 87) would add a 6.5% sales tax to the state's 28.5 cent per gallon tax on gasoline and diesel to generate $580 million per year. The measure puts a floor on the sales tax so that it would not provide less than 10 cents per gallon if pump prices plummet.

The funding plan also includes $1 billion of state highway revenue bonds to be issued over four years, and $567 million of state general obligation bonds for local road and bridge projects.

Republicans in the Legislature have proposed a transportation program that would generate $7 billion over 10 years without an increase in the state gasoline tax, said state Sen. Scott Newman, the senior Republican on the Senate Transportation Committee.

The Republican proposal includes $2 billion of new debt for state and local transportation projects.

Minnesota DOT’s 2016 project list focuses on maintaining the existing inventory of bridges and roads, said spokesman Kevin Gutknecht.

“We are not doing a lot in the way of expansions,” he said. “What we are doing is primarily preservation work, repairing things that are worn out.”

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