Transportation one exception to funding crisis

In 1924, Minnesota voters by a wide margin passed an amendment to the state Constitution, dedicating state gasoline tax revenue to road and bridge building.

The result is a chest of money that can't be touched for anything else, even bailing the state out of a $5 billion revenue shortfall, says Margaret Donahue, the executive director of the Minnesota Transportation Alliance.

"We have a trust fund with constitutionally-dedicated revenue streams. The Legislature can't use that money for general fund purposes, so that money has to be spent on transportation," said Donohue.

So, while nearly every other state activity is in line for budget cuts, state transportation spending is headed up. A good share of the increased spending is directed at bridge repair and replacement.

In the 2008 session, lawmakers overrode the governor's veto and passed a transportation bill that includes $1.8 billion in borrowing over the next 10 years.

The measure also raises, in steps, the state's portion of the gas tax 8 1/2 cents by 2012. All the money goes into the highway trust fund.

The increased revenue means the Minnesota Department of Transportation construction budget for this year over last rises by more than half. In two years, spending will more than double from last year's.

There would have been even more dollars if Minnesotans' driving hadn't nose dived. Sen. Steve Murphy, DFL-Red Wing, who chairs the Senate Transportation Committee, says the dropoff in driving has sliced into the rate of gas tax revenue growth. Growth is down about 2 percent, according to Murphy.

"That's roughly about $20 million. That just means that there may be some projects on the board this year that may have to wait until next year or the year after," Murphy said.

There's little if any chance lawmakers this session will try find more money for transportation, he says. The possible exception is a bonding bill.

Lawmakers are interested in borrowing money for a range of infrastructure spending, including transportation projects that are ready to go and that would put people back to work. However, the state is paying off debt from past borrowing. That and other factors limit the amount of new borrowing, according to Murphy.

"The limit that we have to pay for the debt service on those bonds has been greatly reduced because of the overall budget problem, so I don't think that you are going to see a big bonding bill work its way out of the session," said Murphy.

Last year's road and bridge construction spending in Minnesota marked a low point.

Transportation advocates, who've been complaining for nearly two decades that state spending on transportation infrastructure falls far short of needs, welcomed the turnaround.

Rep. Bernie Lieder, DFL-Crookston, chair of the House Transportation Finance Committee, says the significantly higher rate of spending doesn't answer a big question.

Where will we find the money to repair and maintain the system, and still respond to city dwellers who want congestion relief and rural interests who want stronger roads for bigger loads?

Minnesota has a massive road and bridge system - fifth largest in the country.

The answer may include less money for roads less traveled, especially rural Minnesota highways and byways used by very few vehicles, Lieder says.

"The money is just not going to be there. It's a matter of priority on a lower volume road, they're going to have to take a hard look at it. It's going to be a tough problem," Lieder said.

The big unknown in Minnesota's transportation spending future is federal stimulus spending.

If Congress and the new president can agree on a package, the assumption is there'll be more money for a range of infrastructure spending including transportation.

However for the moment, state lawmakers aren't counting on it and are not factoring it in to their budget deliberations.

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