Minnesota Statewide Transportation Plan: Looking 20 years into the future
Minnesota’s allocation of stimulus funds
On February 17, President Obama signed into law the American Recovery and Reinvestment Act of 2009—also known as the “stimulus package.” On March 3, Mn/DOT received authorization from the Federal Highway Administration (FHWA) to spend $502 million (M) of stimulus funds on Minnesota highway projects. These funds are federally classified as Surface Transportation Funds (STP). Mn/DOT spokespeople have stated that they will be guided by the historical division of 70% on trunk highways and 30% on local roads.
Within the $502M total, $150.7M is designated for urban areas and further broken down according to population: $73.2M is for urban areas larger than 200,000 people (which means it will be used in the Twin Cities metro area). In addition, $61.8M is designated for urban areas with populations of 5,000 to 200,000, and will be used in areas such as Rochester, Duluth, and St. Cloud; $15.7M is designated for urban areas with populations of less than 5,000. Because of the flexibility allowed within the STP program, Mn/DOT has discretion as to whether this $150.7M can be spent on local or trunk highways. All of this $150.7M must be allocated to projects by Mn/DOT and approved by FHWA by March 3, 2010. Mn/DOT has generally broader discretion in allocating the remaining $351.6M in stimulus funds. Within that amount, $15.1M is designated as “Enhancement” funds, meaning they can be used for purposes such as landscaping and bike/ pedestrian accommodations.
Mn/DOT has full discretion in allocating the remaining $336.5M to highway projects. Rules established in the stimulus package state that 50% of the $351.6M (i.e., $175.8M) must be allocated to projects and approved by FHWA within 120 days of March 3—i.e., by July 1. The remaining 50% must be allocated to projects and approved by FHWA by March 3, 2010. In all cases, advertising and awarding of projects will begin after the projects are allocated by Mn/DOT and approved by FHWA. — Richard Kronick, LTAP freelancer
Tim Henkel, director of Mn/DOT’s Planning, Modal & Data Management Division, summarized the “Minnesota Statewide Transportation Plan: 2009- 2028” at the Minnesota Pavement Conference. The plan, which is required by state and federal law, has been in the works since 2007 and will be published this year. The purpose of the plan, said Henkel, is to “establish a transportation vision—not just for Mn/DOT but for the entire state.”
Although the plan addresses all transportation needs, Henkel focused his presentation on highway construction and maintenance needs. As shown in Figure 1, the plan projects that Minnesota will require $65 billion over the next 20 years to achieve the highway system performance targets defined in the plan.
What’s more, the gap between those targets and available funds is growing. Henkel reminded his audience that the last version of the plan (in 2003) stated the gap as $1 billion per year. The 2009 plan “gives us a new figure: $2.5 billion per year for the next 20 years,” he said. (Costs are calculated for the year of construction to reflect cost increases over the next 20 years; the previous plan estimated costs and revenues in constant 2004 dollars.) He also predicted that during the 20-year timeframe of the plan there will be a tripling of “troubled roadways”—from 600 miles to 1,800 miles.
Henkel said this new funding gap figure is based on modest revenue growth in keeping with historical levels. However, the projection does take into account new revenue that will flow from the Chapter 152 legislation passed in 2008 (see Table 1). He also warned that this projection is “our best guess at this point in time”—it gives a longterm, overall outlook—and, inevitably, it will evolve as conditions change.
Given the predicted revenue shortfall, Henkel said Mn/DOT is making a “significant change” in its overall highway infrastructure investment strategy. Instead of placing emphasis on preserving existing structures as has been done in the past, the new plan takes a “balanced approach” that will allow districts more flexibility in deciding which projects to authorize. This shift was necessitated by “the fiscal climate we’re in, the differences that exist in different areas of the state, and the varying needs of our constituents,” he said.
At the same time, the plan contains alternative strategies that can be implemented when additional funds, such as the federal stimulus package, become available (see article in sidebar). Specifically, Henkel said, the plan lists a set of priorities for the top 5% of projects that are left out of the most conservative scenario. This 5% amounts to about $2.5 billion in additional projects.
Henkel also summarized the distribution of funds from Chapter 152 to highway infrastructure projects. “The department received trunk highway bonding authority; in addition, there was a change in the gas tax rate and a few other areas that provide additional revenue—overall about $1.8 billion.” Table 1 shows how that money is to be allocated.
Mn/DOT conducted open houses around the state to explain the draft plan and solicit public comment. The department also encouraged comments by phone, fax, and Web. To learn more about the plan or submit your comments, go to www.dot.state.mn.us/planning/stateplan/index.html. — Richard Kronick, LTAP freelancer