5.5. SR 03-24-2003 - Laserfiche WebLink

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The findings from the survey illustrated in Figure 5 suggest that the cities responding to the survey were more reliant during the survey period of ! 997 through 2001 on state sources to support their road and bridge infrastructure maintenance and improvement programs than the average city. Figures 4 and 5 indicate that the average city receives about 19 percent of its total resources for roads and bridges from state sources, compared to about 23 percent for the sample of small cities surveyed, and 30 percent for the sample of large cities surveyed. The main point, however, is that cities of all sizes rely primarily on local revenue sources, funded by property taxes and property based assessments to finance their local road and bridge programs. Figure 5 Estimated Share of Road and Bridge Revenue Sources: 1997-2001 Cities Under 5,000 Other Federal Citi(;s Over 5,000 10.3% 1.3% q~ Other Federal 11.8% .5% State 23.8% Bonding State 14.9% Bonding 30.4% 17.6% Special Assessments Property Tax / ~ 18.3% 13.5% ¢- General Fund ii 36.2% i Note * Small cities under 5,000 typically do not receive the level of revenues from state sources that is depicted in this chart. The data collected from these cities in the 2002 City Road and Bridge Funding Survey show that just 26 of 108 cities surveyed received any state funds at all, and over 83 percent of all state funding went to just 8 cities (Bird Island, Frost, Jasper, Mahnomen, Melrose, Ortonville, Sherburne and Westbrook. 'roperty Tax / ~1 Fund 18.5% Source: 2002 City Road and Bridge Funding Survey It should be noted that there are a number of non-traditional local funding sources available to cities under certain circumstances. These would include tools such as tax increment financing, property tax abatements, special enterprise funds, and a few others that can work for some cities to help finance certain transportation infrastructure improvements. The availability of these funding sources, however, are limited and still represent the exception rather than the rule in terms of cities' use of these "creative" financing mechanisms as a principal tool. Most cities continue to finance road and bridge construction and maintenance with the traditional funding sources: property taxes, special assessments, and - to a lesser extent - local bonding authority. The following discussion describes these more common local funding sources. The other, less traditional funding sources are described briefly in Appendix 3. Local Property Taxes For the vast majority of Minnesota cities, the property tax base is the primary source of revenue for all city services, including road and bridge construction, maintenance and preservation. In short, the costs of local transportation that are not covered by some form of intergovernmental aid must be paid from locally generated sources of revenue. Since Minnesota cities have very limited flexibility to levy non- property tax revenues, the local property tax generally supports transportation infrastructure investments.