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Home My WebLink About13.F.1. State Transportation Funding Request-Res. No. 6577 13. F. r. CITY OF SHAKOPEE Memorandum TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: State Transportation Funding Request DATE: February 2,2007 INTRODUCTION: The City Council is asked to adopt a resolution urging the Minnesota Legislature to take action necessary to address the current shortfall in funding needed to fix the State's transportation problems. BACKGROUND: We have been informed by the League of Minnesota Cities that many legislators are expressing a reluctance to make difficult votes on funding mechanisms needed fix identified transportation infrastructure needs. Even if approved by the House and Senate, Governor Pawlenty has stated that he will veto any transportation bill which contains a gas tax increase. The current gas tax rate remains unchanged since 1988. The projected shortfall is $1.5 billon annually for each of the next ten years. Transportation. and maintenance improvement costs are contributing in part to increasing local property taxes. The lack of State funding has also delayed critical improvement projects and repairs neededfor both economic and safety needs. The demands are only expected to get worse unless significant action is taken. The constitutional MVST amendment approved by voters in November is indicative of a broad general support for addressing transportation needs. However, even with the phased-in MVST transfer, there was always projected to be a deficit. Because of recent declines in the numbers of new motor vehicles sold(which generates MVST), even those transit and transportation funds which had been allocated are falling far short. In the past couple of years, there has been a spate of construction on high profile projects such as 1-494 improvements. However, those projects have been funded in a large part through borrowed monies. Thatcannot continue forever. Other sorely needed projects, such as the Crosstown Commons project, have been delayed due toa lack offunding. Something else must be done. The League of Minnesota Cities has identified the following areas, which when used in combination, would significantly assist the financing of Minnesota' s transportation issues: 1. Increase the amount of the gas tax. 2. Index future gas tax increases to account for inflation. 3. Increase license tab fees. I 4. Provide for trunk highway bonding, and appropriations to assist local jurisdictions' costs related to projects funded with these bonds. I 5. General obligation fund bonding for local road and bridges, particularly for 6. regionally significant roadways. I Exempt state and local transportation construction projects from sales taxes. 7. Provide for the possibilities of other local funding tools, such as a local option sales tax, expanded wheelage tax authority, and street utility authority. BUDGET IMPACT: The list of recommendations from the LMC includes tax increases. While those are usually unpopular, transportation needs are pressing, and it is therefore likely that tax increases must be considered. Council is reminded that passage of this reso~ution encourages the Legislature to make the necessary choices. However, it is still the State's decision. RELATIONSHIP TO VISIONING: Addressing traffic safety concerns and decreasing congestion supports Goal B: High Quality of Life. RECOMMENDATION: I recommend that the resolution be adopted, which requests the Legislature to adopt a comprehensive road and transit funding package during this session. If approved, copies of this resolution would be forwarded to the Governor and State Legislative delegations. ACTION REQUIRED: If Council concurs, it should, by motion, adopt the following resolution: Resolution No. 6577 A Resolution Requesting That The Minnesota Legislature Adopt Comprehensive Road and Transit Funding in 2007 ~V/A~ Mark McN eill City Administrator MM/js RESOLUTION NO. 6577 A RESOLUTION REQUESTING THAT THE MINNESOTA LEGISLATURE ADOPT COMPREHENSIVE ROAD AND TRANSIT FUNDING IN 2007 . I I WHEREAS, all Minnesota communities benefit from a sound, efficient and adequately funded transportation system that offers diverse modes of travel; and I I WHEREAS, due to budget constraints, cities are increasingly deferring maintenance on the over 39,000 lane miles under municipal jurisdiction of the 277,607 total ~anemiles in Minnesota; and i I I I WHEREAS, local cost participation requirements for trunk highway and county projects are onerous and are contributing to strains on city budgets; and I WHEREAS, existing local funding mechanisms, such as Municipal State Aid (MSA), property taxes, special assessments and bonding, have limited applications, leaving cities unable to adequately address growing transportation needs; and WHEREAS, the recently approved constitutional amendment that phases in dedication of 100 percent ofthe motor vehicle sales tax (MVST) for transportation purposes will address only a fraction of the transportation funding needs in Minnesota, and total MVST revenues are not meeting projections; and WHEREAS, transportation analysts in consultation with the Minnesota Department of Transportation (MnDOT) estimate Minnesota will have to invest an additional $1.5 billion per year in transportation infrastructure for the next ten years in order to meet identified needs; and WHEREAS, transportation infrastructure maintenance and improvement costs significantly contribute to rising property taxes; and WHEREAS, lack of state funding has delayed regionally significant road construction and reconstruction projects across Minnesota; and WHEREAS, Minnesota's transportation system is failing to meet the capacity needs necessary to sustain population growth and promote economic development; and WHEREAS, congestion, inefficient transportation systems and lack of transportation choices lead to greater dependence on foreign oil, increased environmental degradation, and economic disadvantages for Minnesota's businesses and residents; and WHEREAS, many ruraIroads are not built to modern safety standards and are not meeting the needs of industries that depend on the ability to transport heavy loads; and WHEREAS, current funding for roads and transit systems across all government levels in Minnesota is inadequate) and this under-investment hinders Minnesota) s progress as a national business, economic and civic leader. I I I NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF I SHAKOPEE, MINNESOTA, that the Shakopee City Council requests that in 2007 the Minnesota Legislature pass a comprehensive transportation funding package that permanently increases dedicated funding for transportation; and : I BE IT FURTHER RESOLVED that this Council requests that in 2007 Governor Tim Pawlenty allow a comprehensive transportation funding package that permanently increases dedicated funding for transportation that is passed by the Legislature to become law; and that theShakopee City Council supports funding options including, but not limited to) the following: . An increase in the gas tax; . Indexing of the gas tax) provided there is a limit on how much the tax can be increased for inflation in a given amount of time; . Increases in vehicle registration taxes (a.k.a.license tab fees); . Trunk highway bonding, provided the Legislature implements reasonable restrictions on the amount of debt service the state will incur and provided the Legislature appropriates funding to assist with local costs related to projects funded with trunk highway bonds; . General obligation bonding for local roads and bridges) particularly for roads of regional significance and to assist with local cost participation requirements pertaining to trunk highway projects; . Sales tax exemptions for state and local transportation construction projects; and . New local funding tools, such as local option sales tax authority) expanded wheelage tax authority and/or street utility authority; and BE IT FURTHER RESOLVED that the Shakopee City Council defines a comprehensive transportation funding package as an initiative that permanently increases dedicated funding for state and local road and transit systems in Greater Minnesota and the Metropolitan Area. Adopted in Regular Session of the City Council of the City of Shakopee) Minnesota, held this 6th day of February) 2007. Mayor of the City of Shakopee ATTEST: City Clerk