New road money to come gradually

ST. PAUL -- A $6.6 billion transportation package put into law paves the way for more Minnesota highway and bridge projects, but it could be a couple of years before motorists really notice the difference.

When the Legislature overrode Gov. Tim Pawlenty's veto of a 10-year transportation package, it increased taxes and pumped new money into the Minnesota Department of Transportation.

The spending package should allow the agency to repair or replace the state's worst bridges, provide local governments with needed funds for their road and bridge plans and expedite state highway and transit projects.

However, transportation advocates acknowledge the spending package will not address all highway and bridge needs, and it will be a few years before the funding ramps up to an expected average of $660 million a year.

The package generates only one-third the amount of money experts say is needed for state and local transportation projects.

"I hope people realize that," said Rep. Bernie Lieder, a Crookston DFLer and former highway engineer who authored the transportation package.

However, Dave Robley, president of the County Highway Engineer's Association, said of the impact on local transportation infrastructure will be noticeable.

"It'll definitely help," he said.

The spending package will not affect county road work this year, but will allow engineers to begin adding projects to their construction plan for the coming years. That will be a mixture of new projects and work that has been delayed because of flat or declining state aid in recent years. It will vary by county.

"One of the good things about the bill is it's long-term and dedicated (funds)," Robley said. "You can rely on that money and start planning those projects five or six years out and know that that money's going to be there."

Robley, Douglas County's engineer, said the package does not address all the needs, but it a good step. "We were going backwards until this passed."

A MnDOT spokeswoman said the agency has not decided how the new spending will affect specific highway projects.

The department previously said it will have to delay some projects this year because the Legislature did not authorize it to spend additional funds following the Interstate 35W bridge collapse last August. With the new spending plan, Lieder said, that is no longer a problem and MnDOT should be able to move forward with the projects it planned to delay.

The spending plan calls for $1 billion in state borrowing over the next two years, 60 percent of which must be spent on bridge work. Lawmakers say that would nearly cover the cost to repair or replace the 13 worst state bridges in Minnesota.

"We've got this huge need," said Rick Krueger of the Minnesota Transportation Alliance. "We've ignored it for 20 years. We're starting to address it."

Some local projects probably will be funded within a year or two. The package pledged $50 million in borrowed funds to fund the state's share of local bridge work across Minnesota.

"It's where a lot of problems are, but they're not in most cases very big bridges," Krueger said.

Another $10 million in state-borrowed funds is directed to local road projects. That is to be used as grants to counties to help pay for rural road safety projects such as straightening a dangerous stretch of roadway or improving an intersection.

As a response to bridge safety issues raised following the Minneapolis bridge collapse, the transportation package creates a new state bridge safety improvement program. It must include all bridges with structural problems and designs that could make them susceptible to a collapse if one major component fails. The program is designed to identify bridge projects that need accelerated funding.

The package is paid for largely with gasoline tax increases, expected higher sales tax in Twin Cities-area counties, vehicle license tab fee increases and state borrowing.

The state's 20-cent-per-gallon gasoline tax, which only can be used for transportation projects, will increase by 2 cents a gallon April 1, and by 3 cents more by Oct. 1. It will increase by an additional 3.5 cents over the next few years and remain at 28.5 cents for about 30 years.

The spending package also:

E Boosts funding for transit - mainly buses - outside the Twin Cities. Lieder said that is important because rural Minnesota's aging population will increasingly rely on public transportation to get around.

E Provides $500,000 for improvements to port authorities, including in Duluth and Red Wing. That could include dredging or other channel work.

E Requires that MnDOT's southwestern Minnesota district use its new state highway construction funds first to improve state Highway 60, though the route is not named in the legislation.

E Includes $18 million to fix the exterior of MnDOT's St. Paul headquarters.

E Pays for the addition of 40 State Patrol troopers beginning in 2009

E Prohibits the addition of tolls to existing roadways in Minnesota, but does not ban them from being considered for new highways.

"It also is a recognition that there probably will be more tolling down the road," Krueger said of the controversial practice of assessing fees to drive in special lanes or on certain roadways.

Some Minnesotans eventually may pay a lower gas tax than others because of a law dating back to the 1980s.

Minnesota gasoline sellers within 7.5 miles of one in an adjoining state can collect only 3 cents per gallon in gas tax more than collected in the other state.

For instance, if North Dakota's gas tax remains at 23 cents a gallon, that means gas stations near North Dakota only could charge 26 cents per gallon tax, while other Minnesota stations would collect 28.5 cents once the full gas tax increase kicks in a few years down the road.

"It's a non-issue," Rep. Morrie Lanning, R-Moorhead, said about the near future.

The Minnesota gas tax limit is called the "Moe Zone" after long-time Senate leader Roger Moe, who protected gasoline stations in his northwest Minnesota area with the restriction.

Minnesota gasoline sellers near Wisconsin would not be affected if that state does not dramatically lower its gas tax. However, those near Iowa, South Dakota and North Dakota would be affected if their taxes remain in the lower 20-cent range.

Lieder said the Legislature intentionally left the "Moe Zone" untouched in the 2008 transportation spending package.

"We didn't monkey with it," he said. "We never like to raise the issue because as soon as we do, somebody will try to repeal it."

A new transportation bill tax provision would allow counties outside the Twin Cities to raise sales taxes up to a half percent, with voter approval, for transit projects. Twin Cities-area county boards can raise sales taxes a quarter percent for transit, but do not need voter approval.

Lieder said he does not expect any counties to ask voters to raise their sales tax.

State Capitol Bureau reporter Don Davis contributed to this story. Davis and Scott Wente work for Forum Communications Co., which owns the Bemidji Pioneer.