5.5. SR 03-24-2003 - Laserfiche WebLink

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The other primary funding source to the Highway User Tax Distribution Fund is the Motor Vehicle Registration Fee. Figure 10 shows how inflation has eroded revenues from the Motor Vehicle Registration Fee, just as it has eroded gas tax revenues. (The sharp decline in 2001 was a result of a reduction in the Motor Vehicle Registration Fee, which was offset by an increased General Fund contribution to the Highway User Tax Distribution Fund.) Two important conclusions can be drawn from the MSA revenue trends and their impact on city road and bridge financing. First, the "growth" in MSA funds to cities has actually been significantly tempered by the inflationary impacts as the costs associated with road and bridge construction and maintenance have increased. $700.0 Figure 10 Motor Vehicle Registration Fee Revenues; 1991-2001 Current Dollars vs. Inflation Adjusted Dollars $800.0 $500.0 $400.0 $200.05300'0 [ · Vehicle Registration FeesII --'~-~ Vehicle Registration Fees in I 1991 Dollars I $100.0 $0.0 1991 1992 1993 19oM~ 1995 1996 1997 1998 1999 ~ 2001 Source: Transportation Policy Institute Making matters worse, these funds have had to be spread even thinner over the years as more cities and roadway mileage have been added to the MSA system, and the condition of much of the MSA system has deteriorated as the system has aged. Second, as the actual purchasing power of the aid to large Minnesota cities through the MSA program has failed to meet the increasing construction and maintenance costs, MSA eligible cities have had to rely more heavily on their own locally generated resources to meet both their MSA system needs and the many underfunded needs on their non-MSA systems. State Bonding Just as city governments have the authority to issue their own bonds to support road and bridge infrastructure investments, the state government has the authority to issue bonds for the expressed purpose of generating resources specifically for local road and bridge needs. State bonds to support local road and bridge construction and maintenance are backed by general fund revenues and are typically included in the capital bonding bill passed by the Legislature in even-year sessions. These bonds have in the past been used to support such purposes as local bridge construction, e.g. the Local Bridge Replacement Program, Minnesota Statutes § 174.50. The Local Bridge Replacement Program was initiated in 1976, and has provided various amounts of legislative funding to Minnesota cities and counties over the years. In 1998, the Legislature passed a $34 million program, the largest annual allotment since 1979 (when $52 million in local bridge bonding authority was approved). In the ten-year period from 1990 through 1999, the program provided an average of $8 million each year to finance local bridge replacement and rehabilitation. It is important to emphasize that state bridge bonds generally match or supplement other bridge repair and replacement resources, such as federal aid, County State Aid and Municipal State Aid allotments, resources from the state Town Bridge Account (funded by the Highway User Tax Distribution Fund) and the local property tax. Bond funds are often the catalyst that allows the bridge to be replaced or rehabilitated. Historically, bridge bonds typically provide 20% to 40% of a project's cost. It should also be noted that the Minnesota Department of Trade and Economic Development administers certain state economic development grant and loan programs that provide limited funding for local transportation infrastructure improvements. 14