City Street Funding Bill Laid Over for Possible Inclusion in Omnibus Bill

The League and others support the measure, which would add a $10 surcharge on license tab fees and on motor vehicle title transfers to be dedicated to city-owned streets statewide.
(Published Mar 20, 2017)

A 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 heard in the House Transportation Finance Committee on March 16.

After a brief discussion, the bill was laid over for possible inclusion in the omnibus transportation finance bill that will be assembled later this session. The move does not guarantee that the measure will be included in the omnibus bill, but does keep it alive as a potential funding component.

HF 934, authored by Rep. Frank Hornstein (DFL-Minneapolis), 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.

The Senate companion bill, SF 933, authored by Sen. Scott Dibble (DFL-Minneapolis), has not yet been scheduled for a hearing.

The provision raises approximately $57 million annually. Half of the funds would be directed to the Small Cities Assistance Account, established by the 2015 Legislature, and 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.

The League has prepared city-by-city estimates showing how much revenue each city would receive annually if this initiative is enacted.

A group made up of representatives of the League, the Coalition of Greater Minnesota Cities, the Minnesota Association of Small Cities, Metro Cities, and the cities of Minneapolis and St. Paul, is working to secure support for the measure.

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 percent 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. According to a report released in 2012 by the Transportation Finance Advisory Committee, cities collectively need an additional $400 million per year to bring city streets up to an economically competitive standard.

Get involved
Support from cities for this initiative will be critical to its success. Please consider communicating with your legislators about the need for this legislation. A number of city councils passed resolutions of support for the same proposal in the last legislative biennium, and the League continues to use this list of cities to support advocacy efforts. The League would like to grow the list to include additional supportive cities. Please see the League’s City Transportation Advocacy Toolkit to learn more and download the model resolution.

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