The Transportation Funding Gap
This is what you have heard.
Twenty Year Funding Needs to Achieve Desired Outcomes ($ billions)
Scenario 1 Scenario 2 Scenario 3
System/Mode Anticipated Transportation Revenue Expected Over the Next
20 Years
Maintain Current Performance Economically Competitive/World Class System
State Highway System(State Roads and Bridges) $18.0 $5.0 $10.0 - 12.0
County State Aid System $5.0 Municipal State Aid System $1.6 Greater Minnesota Transit $1.9 $0.2 $0.9
Metropolitan Area Transit(thru 2030)
$8.5 $1.6 $3.2 - $4.8
Passenger Rail $0.1 ─ $5.0 - 7.0
Freight - Rail and Ports $0.3 $0.3 $0.6 Airports(Not MAC System) $1.4 $0.6 $0.8
Totals $36.8 $7.7 $20.5 - $26.1 Annual Funding Gap ─ $0.4 $1.0 - $1.3
Twenty Year Funding Needs to Achieve Desired Outcomes (20 Year Needs in $ billions) AFG = Annual Funding Gap
Scenario 1 Scenario 2 Scenario 3
System/Mode Anticipated Transportation Revenue Expected Over the Next
20 Years (Status Quo)
Maintain Current PerformanceFor the Next 20 Years
Economically Competitive/World Class System
For the Next 20 Years
State Highway System(State Roads and Bridges)
$18.0 $5.0($250 mil AFG)
$10.0 - 12.0($500 mil.- $600 mil AFG)
County State Aid System $5.0 ($2.3)Initial est.
($5.6)Initial est.
Municipal State Aid System $1.6 ($0.8) Initial est.
($1.7) Initial est.
Greater Minnesota Transit $1.9 $0.2 ($10 mil AFG)
$0.9($45 mil AFG)
Metropolitan Area Transit(thru 2030)
$8.5 $1.6($107 mil AFG)
$3.2 - $4.8 ($213 mil- $320 mil AFG)
Passenger Rail $0.1 ─ $5.0 - 7.0 ($250 mil -$350 mil AFG)
Freight - Rail and Ports $0.3 $0.3($15 mil AFG)
$0.6 ($30 mil AFG)
Airports(Not MAC System) $1.4 $0.6
($30 mil AFG)$0.8
($40 mil AFG)
An Illustration of Various Transportation Funding Mechanisms and Projected Revenue
Generating Capacity
Motor Fuels Tax Funding Mechanism
Current Rate Incremental Yield
Annual YieldFY 2012
Illustrative Rate and Annual Yield
20 year Yield
Motor Fuels Taxes• Gas tax• Diesel tax
$0.285 per gal.
$0.01 yields $32.0 million annually to HUTDF
$912 million x 95% = $866.4 million
62% TH = $537.2 million
29% Counties = $251.3 million
9% Municipal State Aid = $78.0 million
$0.25 per gal. increase = $800 million to HUTDF x 95% = $760 million($40.0 million is allocated under statute to counties and townships)
62% TH =
$471.2 million 29% Counties
= $220.4 million
9% Municipal State Aid = $68.4 million
($0.8 billion to Counties and Townships)
$9.42 billion to TH Fund
$4.41 billion to Counties State Aid Fund
$1.37 billion to Municipal State Aid Fund
Motor Vehicle Registration Fees
Funding Mechanism
Current Rate Incremental Yield
Annual YieldFY 2012
Illustrative Rate and Annual Yield
20 year Yield
Registration Fees
$35 base rate + 1.25% of value +$10(Depreciates by 10%/year)
0.10% = $46.2 million to Highways Users Tax Distribution Fund (HUTDF)
$577.24 million to HUTDF x 95% = $548.38
62% to TH
Fund = $340.0 million
29% to CSAH = $159.0 million
9% to MSA = $49.4 million
0.25% increase = $115.45 to HUTDF x 95 % = $109.67($28.9 million is allocated under statute to counties and townships)
62% TH = $67.9 million
29% Counties = $31.8 million
9% Municipal State Aid = $9.9 million
($0.58 billion to Counties and Townships)
$1.36 billion
to TH Fund $0.63 billion
to Counties $0.20 billion
to Municipal State Aid Fund
Motor Vehicle Sales Tax Funding Mechanism
Current Rate Incremental Yield
Annual YieldFY 2012
Illustrative Rate and Annual Yield
20 year Yield
Motor Vehicle Sales Tax
6.5% of vehicle costs60% HUTD40% Transit Assistance Fund
1% yields $30 million to TH fund1% yields $22 million to County and Municipal1% yield 35 million to Transit Assistance Fund
$336 million to HUTDF x 95% = $319.2 million($225 million to Transit Assistance Fund)
62% to TH Fund = $197.9 million
29% to CSAH = $92.6 million
9% to MSA = $28.7 million
0.50% increase = $43.15 million x 60% = $25.89 HUTDF (40% to Transit Assistance Fund = $17.26 million) ($16.8 million is allocated under statute to counties and townships)
62% TH =$16.1 million
29% Counties = $7.1 million
9% Municipal State Aid = $2.6 million
$17.26 to Transit Assistance Fund
($336 million to Counties and Townships)
$321 million to TH Fund
$141.6 million to Counties
$52.0 million to Municipal State Aid Fund
$345.2 million to Transit Assistance Fund
Sales Tax Funding Mechanism
Current Rate Incremental Yield
Annual YieldFY 2012
Illustrative Rate and Annual Yield
20 year Yield
Statewide Sales Tax
6.875% of select purchases
1 .0 percent generates $670 million
Annual yield to the state is $4.6 billion
0.50% increase = $335 million
$6.7 billion
Metropolitan Area Sales Tax (5 counties)
.25% of purchases in five counties (Anoka, Dakota, Hennepin, Ramsey, Washington)
.25% generates $100 million
Annual yield to County Transit Investment Board (CTIB) is $100 million
.50% increase = $200 million
$3.6 billion (thru 2030)
Alternative Transportation FinancingApplication Public-Private
PartnershipsTolling/Direct
User FeesValue
CaptureSponsorships
Existing State Hwys
New Capacity on State Highways
New Capacity on State Bridges
Local Roads and Bridges
Metropolitan Transit
Transit (Greater MN)
Passenger Rail
Ports and Waterways
Airports (state)
Transportation Improvement Districts Application Local
Option Sales Tax
Wheelage Tax
Public-Private
Partnerships
Tolling Value Capture
Sponsor-ships
Assessment
Examples
Area 1: New Capacity on State Highways Area 2: New Capacity on Local RoadsArea 3: Street Improve-ment Districts
Anticipated Outcomes for Status Quo Scenario: State Highways
Interstates maintained at MAP-21 target Principal arterials become 16% poor (1,300 miles) Minor arterials become 42% poor (2,800 miles) by 2032 Bridge condition is well under performance targets with 76% of
bridges in good or satisfactory condition and 20% of bridges (647 bridges) in poor condition
Safety investments remain at current levels, traffic fatalities continue to decline
Metro congestion increases and reliability decreases systemwide, reliability and throughput increase at spot locations
Inter-regional corridors have limited delays, performance on a handful of major corridors continues to decline
Little money available for expansion, regional and local priorities, economic development, etc
Anticipated Outcomes for Maintaining Current Performance Scenario: State Highways
Interstates maintained at MAP-21 target Principal arterials become 6% poor by 2032 (454 miles) Minor arterials become 11% poor by 2032 (741 miles) Bridges at or near current performance targets Traffic fatalities continue to decrease Metro congestion increases slightly systemwide, reliability
improves on future MnPASS corridors and at congestion management and safety HROI project locations
IRCs continue to meet performance target Modest amount available for expansion, regional and local
priorities, economic development, etc
World Class/Economically Competitive System Scenario: State Highways
Interstates maintained at MAP-21 target Principal arterials improve to less than 2% poor by 2032 (151
miles in poor condition) Minor arterials improve to less than 3% poor by 2032 (202
miles in poor condition) Bridge conditions meet targets of less than 2% poor and
greater than 84% good and satisfactory Safety investments remain at current levels, MnDOT meets
Toward Zero Deaths fatality targets in future years With capacity investments, metro congestion remains stable,
reliability improves on MnPASS corridors and at HROI locations Modest amount available for expansion, regional and local
priorities, economic development, etc
Greater Minnesota Transit Anticipated Outcomes
Maintaining current performance Annual hours of service remain at projected 2013 level
of 1.23 million hours Some revenue is reserved from 2013 to 2022, then
spent to maintain service as inflationary costs exceed revenue
Economically competitive/World class Minnesota Statutes §174.24 Meet 80% of transit needs by July 1, 2015 Meet 90% of transit needs by July 1, 2025
Freight RailAnticipated Outcomes
• Rail Grade Crossing Improvement – Public cost share is 25%– Performance goal of 50% crossings with gates & signals = 2250 of
4500 crossings vs. 1500 (33%) currently– Assumes $250K per crossing for gates & signals– Assumes useful life of signal system is 25 years
• Selected needs as identified in 2010 MN Statewide Rail Plan.– Statewide short line railroad track and structure upgrades to handle
Class 1 286,000 lb. rail cars – Economic development projects include rail-served business parks,
intermodal container, transload, etc
Ports and Waterways Anticipated Outcomes
• Port upgrades include reconstructing dock walls, warehouse rehabilitation, improving road and rail access, limited dredging, loading equipment, etc.
• Appropriations over past five years have totaled $7.5 million = $1.5 million/year
• Assumes twenty year needs of $90 million based on average annual needs as identified by the state’s port authorities
Statewide AirportAnticipated Outcomes
• Current System Maintained• Eliminates runway and taxiway extensions• No new airports• Funding priorities: safety, mobility, financial,
operations, preservation• No new navigation (NextGEN) deployment• Economically Competitive/World Class
Passenger Rail Anticipated Outcomes
• Full build out of Phase 1 projects as a statewide system over twenty-year timeframe:– Twin Cities to Chicago -110 mph service– Twin Cities to Duluth -110 mph service– Twin Cities to Rochester -150 plus mph service– Twin Cities to St. Cloud, Moorhead -up to 90mph service– Twin Cities to Mankato -up to 90mph service– Twin Cities to Eau Claire -up to 90 mph service
• 20-year capital cost estimate $4B - $5.1B for priority passenger and share freight rail improvements if built as a system, built as a series of individual unrelated projects the 20-yr. estimate is $4.5B - $5.7B.
• Outcomes:– Between 4.1 to 6 million annual riders.– Annual operating subsidies of $41m - $95m are based on a farebox recovery of approximately 71% -49%.– Shared freight and passenger rail improvements– Best case scenario in terms of operations cost– Interstate/intrastate Pass. rail connection to economic centers– 2009 $26m in State G.O. Bonds– Phase 1 State Rail Plan projects implemented
Metropolitan Area Transit Scenario 1 – Status Quo
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• Continue to operate the transit system that exists today and finish Central LRT and Cedar Stage 1
• System includes:– Existing bus and Metro Mobility service levels– Mandatory Metro Mobility (ADA) service increases– Hiawatha LRT– Northstar Commuter Rail– Central LRT starting in 2014– Cedar Ave BRT Stage 1 starting in 2013
Metropolitan Area Transit Anticipated Outcomes for
Status Quo Scenario
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• Increased fares• Reduced service• Reduced ridership• Does not address growing demand• Service quality and customer satisfaction
reduced
Metropolitan Area Transit Scenario 2 – Maintain Current Performance
21
• Regional growth requires more transit investments to maintain current mobility levels
• System includes:– Scenario 1 service levels– Bus service expansion (0.5% growth / year)– Southwest LRT (SWLRT)– I-35W South BRT– Cedar Ave BRT Stage 2– Three Arterial BRT corridors
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Expected Outcomes:+ Positive results for residents+ Addresses growing transit demand and makes progress
toward doubling ridership by 2030+ New connections between home, school, work and
entertainment
+ Positive results for businesses+ Transit spurs economic development+ Solid infrastructure attracts jobs & development
Metropolitan Area Transit Anticipated Outcomes for
Maintaining Performance Scenario
Metropolitan Area TransitScenario 3 – Economic Competitiveness
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• Improved mobility levels for residents and businesses and enhanced regional economic competitiveness
• System includes (conceptual example):– Scenario 1 and 2 service levels– Bus service expansion (1.0% total growth/year over status quo)– Two additional LRT (after SWLRT)– Six additional Arterial BRT corridors– Three additional Highway BRT/Managed Lane corridors
Scenario 3 based on the transit vision in the Council's 2030 Transportation Policy Plan and the Program of Projects
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• Positive results for residents– Addresses more growth in demand and doubling of ridership by 2030– Significantly better connections between home, school, work and entertainment– Faster, cheaper transportation options that are safe and environmentally-friendly
• Positive results for business– Additional 500,000 employees will have access to jobs via transit– Freight and logistics savings– Investments compete well with similar investments in peer regions
• Positive result for all taxpayers: A return on investment (ROI) between $6.6 and $10.1 billion to 2030
Metropolitan Area Transit Anticipated Outcomes for
Economic Competitiveness Scenario
Metropolitan Area TransitScenario 4 – World Class
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• Accelerated transit investment program, sustained beyond 2030
• A more robust, balanced and comprehensive regional transit system
• System includes (conceptual example):– Scenario 1, 2, and 3 service levels– Bus service expansion (1.5% total growth/year over status quo)– Three additional Arterial BRT corridors– Two additional rail lines– Two additional Highway BRT/Managed Lane corridors– Six streetcar lines
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• Positive results for residents– Significantly address growth in demand and more than double ridership by 2030– Extensive connections between home, school, work and entertainment– Additional faster, cheaper transportation options that are safe and environmentally-
friendly
• Positive results for business– Additional employees will have access to jobs via transit– Additional freight and logistics savings– Position the region to surpass investments in peer regions and further enhance regional
competitiveness
• Positive result for all taxpayers: an ROI between $10.7 and $16.5 billion in 2030
Metropolitan Area Transit Anticipated Outcomes for
World Class Scenario
Metropolitan Area Transit Summary
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• Scenario 1: results in service cuts and less mobility and leaves this region falling behind peers and losing competitiveness
• Scenario 2: brings the region in line with existing conditions of competing peer regions
• Scenarios 3 and 4: make the region competitive with peers and provide opportunities to attract additional investment