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Metro CitiesTransportation Policy CommitteeAugust 10, 2015
Overview of Minnesota Highway and Transit Finance
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• MN and Metro Area transportation revenues and expenditures
• Highway revenues and expenditures
• Transit revenues and expenditures
Today’s topics
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• Minnesota’s constitutional dedication of the gas tax, vehicle registration tax and the motor vehicle sales tax to specific transportation purposes, combined with federal modal-based funding programs, has led to a very segmented system of funding between highways and transit (i.e. highway funds are for highways and transit funds are for transit)
General Concept
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2014 Minnesota Transportation Revenues$5.3 billion
Local Property Taxes and Fees
34%
Fares & Other Transit3%
Federal Transit4%
General Fund & State Bonds
3%
CTIB Sales Tax2%
Transit MVST5%
Highway MVST7%
Vehicle Registration Tax12%
Gas Tax16%
Federal Highway13% Other Misc. Highway
1%
Highway User Fund
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2014 Minnesota Transportation Spending$5.3 billion
City Roads & Transportation24%
County Roads & Transportation
22%
Townships7%
MnDOT Debt Service3%
MnDOTConstruction15%
MnDOT Operations & Other Highway
11%
Public Safety & Other Transfers
2%
Gr MN Transit & Rail Of-fice2%
Metro Area Transit Capi-tal4%
Metro Area Transit Operations
10%
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2014 Metro Area Transportation Revenues$2.4 billion
Local Property Taxes and Fees
38%
Fares & Other5%
Federal Transit8%
General Fund & State Bonds
4%
CTIB Sales tax 5%
Metro Area Transit MVST9%
Federal Highway9%
Highway User Taxes22%
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2014 Metro Area Transportation Spending$2.4 billion
City Roads33%
County Roads 15%
MnDOT Construction15%
MnDOT Operations & Other Highway
6%
Metro Area Transit Capital 9% Metro Area Transit Operations
22%
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State highway revenues
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• $878 M in FY14 or $30.8 M/penny
• Current rate is 28.5 cents per gallon
• Includes base 25 cents per gallon and annual adjustment for debt service on bonds
• Per penny revenue declining over recent years, from high of $32.6 M/penny in early 2000s
• Revenue constitutionally dedicated only to highway purposes
Motor fuel tax (Gas tax)
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• $652 M in FY 14
• Passenger vehicles pay based on age and depreciated value of vehicle
• Vehicles 11 years and older pay flat $35 tax
• 35% - 40% of vehicles pay minimum rate
• Constitutionally dedicated to highway purposes
Vehicle registration tax (tab fees)
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• Constitutionally dedicated to highways and transit in 2007; phased-in over 5 years
• 60% dedicated to highways, 40% to transit
• FY14 $384M to highways; $256M to transit
• 1993-2002 average growth of 10% per year; 2002-2009 decreased 4% per year; 2009-2014 growth rebounded to over 7% per year
Motor Vehicle Sales Tax (MVST)
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FY 2002
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
$350
$450
$550
$650
$750
$850
614 606594
557538 532
513
442453
505
559
598
640
699
740
788
834
853
State MVST Total - Actual and February 2015 Forecast Compared to Prior State Forecasts
Prior Forecasts
Actual
Feb 15Forecast
In $Millions
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• Receives constitutionally dedicated state funds for highway purposes (gas tax, registration tax, MVST)
• Used only for highway purposes
Highway User Tax Distribution Fund (HUTDF)
HUTDF
FY14 $1.92 Billion
Motor Fuel Tax$ 878 M
Registration Tax$ 652 M
60% of Motor VehicleSales Tax
$ 384 M
Other Income$ 3 M
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• Constitution requires revenues to be distributed:– 5% legislatively determined to highways – 95% remainder allocated 62% to state highways, 29% county
highways, 9% municipal streets
Highway User Tax Distribution Fund
HUTDF
FY14 $1.92 Billion
Trunk Highway Fund58.9%
County StateAid Highways
27.55%
Municipal StateAid Streets
8.55%
Town Roads, Bridges & Flexible
Fund 5.0%
Collection CostsDNR & Other
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• 30,400 mile CSAH system
• FY14 revenues $531 M
• All 87 counties participate, distribution formula:
County State-Aid Highways (CSAH)
50% Needs
30% Lane-miles 10% Equally
10% VehicleRegistrations
40% Vehicle Registrations
60% Needs
68% of CSAH Funds 32% of CSAH Funds
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• Only cities ≥ 5,000 population receive municipal state-aid
• 2,800 mile MSA system
• FY14 revenues $162 M, distribution formula:
Municipal state-aid streets (MSA)
50% Population
50% Needs
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• 11,933 mile TH system owned by MnDOT (constitutionally limited to 12,200 miles)
• Total FY14 THF expenditures: $1.6 Billion (includes federal revenues)
• Appropriated 95% to MnDOT and 5% to State Patrol
• $1.5 Billion MnDOT share in 2014 went:– $800M (52%) to road construction related activities– $580M (39%) operations, maintenance, other highway spending– $136M (9%) debt service
State Trunk Highway Fund (THF)
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MnDOT Debt Management Policy
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Statewide Construction Outlook
Transit Revenuesand Expenditures
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• 73 of 80 counties have some form of transit service– 6 urbanized systems (Duluth, St. Cloud, etc.)– 11 small urban systems– 36 rural county/multi-county systems– 4 systems for elderly and disabled
• Total ridership: 12 million riders (2014)
• Total FY14 budget: $68.2 M
Greater Minnesota transit systems
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Greater MN transit2014 Operating BudgetRevenues
$68.2 MExpenses$68.2 M
Federal22%
State General Fund21%MVST
40%
Fares / Local17%
Urban Regular Route39%
Rural Sys-tems50%
Elderly / Disabled
7%
Small Urban
4%
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Metropolitan CouncilBus Regular Route
METRO Blue Line and METRO Green Line LRT
METRO Red Line BRT
Northstar Commuter Rail
Metro Mobility
Contracted Bus Regular Route
Transit Link Dial-a-Ride
Metro Vanpool
Suburban Transit Providers (Opt Outs)Bus Regular Route and dial-a-ride
Regional Transit Services
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2014 Regional Transit Ridership
Express9%
Urban Local63%
Commuter Rail1%
Light Rail16%
Met Mo/ Dial-a-Ride
2%
Suburb Local
6%U of M
3%
Bus system accounts for 83%of regional ridership
97.5 million rides CY14
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Transit Operating Funding Sources
• Motor Vehicle Sales Tax (MVST)– Metropolitan area transit receives 36% of statewide MVST
• State General Fund– Legislatively appropriated for Metro Mobility and LRT operations
• Federal Funds– Formula capital funds, can be used for preventive maintenance in
operating budget
• Fares– Passenger fares from all services
• Local and Other– CTIB transitway operating funds– Advertising and other revenue
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CY 2015 Metropolitan Transit Operating Budget
MVST262.246%
State$76.813%
Federal$28.25%
Fares 108.419%
Reserves19.93%
Other3.31%
CTIB/Local31.96%
Property Tax
$45.08%
Metro Transit
Bus319.856%
Green Line35.36%
Blue Line32.16%
Northstar17.63%
Metro Mobility
62.211% Transp. Planning
61%
TransitLink$6.71%
Fixed Route19.93%
Pass Through31.86%
Debt Service
44.38%
Expenses$575.7M
Revenue$575.7M
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• State bonds
• Regional Transit Capital
• Federal Funds
• CTIB Sales Tax
• Regional Rail Authorities/Other Local
Transit Capital Funding Sources
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• Source of capital funds for basic transit system
• Legislature authorizes the sale of bonds
• Debt service paid with property taxes levied by Council
• Levy paid by Transit Capital Levy Communities
Regional Transit Capital
Questions?
Amy VennewitzMTS Planning & Finance
651-602-1058