Small Cities Assistance Account Funded in Transportation Bill

July 12, 2021

The omnibus transportation bill provides $18 million in one-time funding for the account, and payment amounts are now available.

This page was updated on July 13 to reflect that the Small Cities Assistance Account payment amounts are actual and not estimated.

The omnibus transportation bill signed by Gov. Tim Walz on June 26 contains $18 million in general funds for the Small Cities Assistance Account, a program established in 2015 to provide funding for construction and maintenance of roadways in cities with a population less than 5,000. The provision is found in First Special Session Chapter 5, authored by Rep. Frank Hornstein (DFL-Minneapolis) and Sen. Scott Newman (R-Hutchinson).

The funding is for the construction and maintenance of roads located within the city and can include land acquisition, environmental analysis, design, engineering, construction, reconstruction, and maintenance.

The cities that are eligible for Small Cities Assistance Account funds are those that do not receive direct funds from the constitutional formula that distributes proceeds from the gas tax, motor vehicle sales tax, and license tab fees. The Small Cities Assistance Program is administered by MnDOT’s State Aid for Local Transportation Division, with the funding distributed by the Minnesota Department of Revenue.

Payment amounts available

The Department of Transportation has calculated the amounts that will be paid to each eligible city in 2021. Eligible cities should expect to see the funds in the coming weeks.

View the payment amounts to eligible cities from the Small Cities Assistance Account in 2021 (pdf)

One-time funding

Since its creation, the Small Cities Assistance Account has only been funded three times: $12.5 million in 2015, $8 million in 2017, and $8 million in 2018. The League has consistently requested that funding for the program be made a permanent part of the state’s transportation budget so cities can plan for spending the funds. Unfortunately, the 2021 appropriation is again one-time funding.

Distribution formula

The formula for distributing the funds is as follows:

  • 5% equally allocated to all cities.
  • 35% allocated based on each city’s share of lane miles of municipal streets compared to the total municipal lane miles of all eligible cities.
  • 35% allocated based on each city’s share of population compared to the total population of all eligible cities.
  • 25% allocated based on each city’s share of the state aid adjustment factor compared to the sum of the state aid adjustment factor for all eligible cities.

Questions?

Contact Chris Kufner, MnDOT Deputy State Aid Engineer, at chris.kufner@state.mn.us or (651) 366-3804.

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