The measure would add a $10 surcharge on license tab fees and on motor vehicle title transfers to be dedicated to city streets in large and small cities.
A League initiated bill that provides dedicated state funding for city streets, including funding that can be used for non-Municipal State Aid (MSA) city street maintenance, construction, and reconstruction, was introduced in the Minnesota Senate on Feb. 9.
SF 1358 (Sen. Jim Carlson, DFL-Eagan) would add a $10 surcharge on license tab fees and on motor vehicle title transfers to be dedicated to city streets in large and small cities. It was referred to the Senate Transportation Committee, where it has not yet been scheduled for a hearing. The bill is pending introduction on the House side.
When the bill was first introduced in 2017, it was estimated it would raise approximately $57 million annually. Under the measure:
- Half of the funds would be directed to the Small Cities Assistance Account, established by the 2015 Legislature for cities with populations below 5,000 that do not receive funds through the constitutional formula that are deposited into the Highway User Tax Distribution Fund.
- The other half would be dedicated to a new Larger City Streets and Bridges Account.
- The funds would not be subject to the constraints of the MSA funds dedicated in the Minnesota Constitution.
Why is the legislation needed?
Though city streets are essential to mobility and economic vitality in Minnesota communities, funding for those streets has remained unaddressed in transportation funding bills for decades. City revenues are not keeping pace with needs for municipal street maintenance, construction, and reconstruction.
Currently, nearly 84% of city streets are funded only with property taxes and special assessments. Further, when state and county highway investments occur, cities have the added burden of cost participation, which diverts dollars from city streets. The bulk of the 22,500-mile city street system is not eligible for MSA, and non-MSA city streets are without any dedicated funding sources.
Support from cities for this initiative will be critical to its success. Please consider communicating with your legislators about the need for this legislation.