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Updated Small and Large City Street Funding Estimates Released
Estimated fiscal year 2026 and fiscal year 2027 revenues and distributions for the Small Cities Assistance Account and the Larger Cities Assistance Account have been released by the Minnesota Department of Revenue and Minnesota Department of Transportation.
The Minnesota Department of Transportation State Aid for Local Transportation Division announced April 8 that it has updated the Transportation Advancement Account (TAA) webpage to reflect the 2026 February state budget and economic forecast.
The TAA funds two programs that directly benefit cities: the Small Cities Assistance Account, which provides funds to cities with populations under 5,000 that do not receive revenue from the Highway User Tax Distribution Fund; and the Larger Cities Assistance Account, which is distributed to municipal state aid (MSA) cities (those with populations over 5,000) for non-MSA city streets. The Larger Cities Assistance Account funds are distributed on the same formula as MSA but are not restricted to use on the MSA system.
Past and anticipated distributions provided
The updates provide totals received for the previous biennium and anticipated distributions by city for the current biennium. Although the TAA fund is not yet generating enough revenue to fund large projects, it is growing each year and is expected to continue to increase.
Small Cities Assistance Account distributions are as follows:
- FY 2024 actual distribution by small city (PDF)
- FY 2025 actual distribution by small city (PDF)
- FY 2026 forecast distribution by small city (PDF)
- FY 2027 forecast distribution by small city (PDF)
Larger Cities Assistance Account distributions are as follows:
- FY 2024 actual distribution by large city (PDF)
- FY 2025 actual distribution by large city (PDF)
- FY 2026 forecast distribution by large city (PDF)
- FY 2027 forecast distribution by large city (PDF)
The estimates for the fiscal year 2027 should help cities plan for the use of these funds, which are restricted to use for city streets. Funds are generally deposited in two equal installments on July 20 and Dec. 26 each year.
About the TAA
The TAA was created by the Legislature in 2023. It is funded primarily by a 50-cent retail delivery fee on transactions over $100 and a dedicated portion of the state general sales tax on auto parts. These funds are intended for local transportation, including transit, active transportation, and road rehabilitation, with a phase-in period through 2033.