Minnesota Roadway Funding: Revenue Sources & Distribution
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Minnesota Roadway Funding: Revenue Sources & Distribution
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2020-06
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Transportation Policy and Economic Competitiveness Program, University of Minnesota
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Report
Abstract
Minnesota roadway funding comes from a combination of federal, state, and local sources. Federal funding comes primarily from the federal motor fuel tax, while most state funding comes from the three state highway user taxes: the state motor fuel tax, the registration tax, and the motor vehicle sales tax. These funds support the state trunk highway system that includes interstates and state highways, in addition to providing aid to local governments. Local highway funding comes from general funds, made up primarily of property taxes and assessments, in addition to a few dedicated local transportation taxes. This revenue is used to support highways and streets under the jurisdiction of counties, cities, and townships. The network of highways and local roads is essential to the state's economy and the daily activities of Minnesota residents. Maintaining, expanding, and operating this infrastructure is a major expense for the state and local governments inside Minnesota. Generating sufficient revenue for highways and streets remains a major challenge, and recent revenue projections estimate a shortfall of $18 billion in necessary funding between 2018 and 2037, for the state highway system alone. Understanding Minnesota's road financing structure is important to anticipate and address future transportation changes. This report details federal, state, and local government funding for the roadway system in Minnesota. It explores how roadway funding is generated and distributed, as well as the history of current funding mechanisms. Statistics from the Minnesota Transportation Finance Database are used throughout this paper.
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Zhao, Jerry; Fonseca, Camila; Bean, Nate; Lari, Adeel. (2020). Minnesota Roadway Funding: Revenue Sources & Distribution. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/253534.
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