5.5. SR 03-24-2003 - Laserfiche WebLink

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D. State Funded City Streets - Cities Over 5,000 There have been a number of studies prepared in recent years that have thoroughly examined the funding adequacy of the system of state aid to qualifying cities through the Municipal State Aid funding formula, and also to Minnesota's 87 counties through the County State Aid Highway formula. Funding systems of these "major" local roadways have been the focus of these studies largely because they involve the distribution of state revenues from the Highway User Tax Distribution Fund. As indicated earlier, the emphasis in this report is on the city street systems that are not supported by state aid. However, to provide a complete assessment of city road and bridge needs, this section will briefly summarize some of the key findings relating to MSA system needs that have been identified in previous reports. The sponsors of this report generally support the notion that the MSA funding formula does not provide sufficient funding to fully support the construction and maintenance needs of the MSA system, and that funding increases would benefit those cities that are eligible to receive funding, i.e. the 130 cities over 5,000 in population. The fundamental issues involving the MSA system and the adequacy of MSA funding levels include the following: #D-l: The MSA system has grown much more rapidly since its inception 40 years ago than the state owned system or the county owned system over the same timeframe, yet the funding distribution has remained the same. Figure 35 shows the comparison of the expansion in the state maintained system (trunk highways and interstates), the County State Aid Highway system, and the Figure 35 Change in Roadway Miles: 1960 to 2002 System 1960-1961 2002 % Change Mn/DOT System (Trunk Highways and Interstate) 11,839 11,932 0.1% CSAH 29,101 30,385 4.4% MSA 1,142 2,818 146.8% Source: Mn/DOT State Aid to Local Transportation Group, and Mn/DOT Annual Reports Municipal State Aid system. As the table shows, mileage on the MSA system has expanded rapidly while the mileage on the other two systems has remained virtually constant. The problem lies in the fact that the constitutional distribution of Highway User Tax Distribution Fund revenues has been held at nine percent since the MSA system was established in the late 1950s. At that time, there were 58 MSA eligible cities. Today there are 130 MSA eligible cites that share the same nine percent distribution from the state Highway User Tax Distribution Fund. The growth in the number of eligible cities has led to the growth in the total eligible mileage, as presented in Figure 35. #D-2: Current MSA funding levels do not cover the full costs of improving these cities' MSA street systems. As described in Section 2 of this report, the state MSA system provides funding to eligible cities on the basis of two factors: population and needs. The population distribution, as one would expect is straightforward: half of the total allotment is distributed to eligible cities at the same proportion as their share of total population among the eligible cities. 36