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Addressing Minnesota's Transportation Needs: Challenges and Solutions

On February 10, 2014, Charlie Zelle, the Commissioner of the Minnesota Department of Transportation, presented key insights into Minnesota's transportation needs. Highlighting the state's rapid economic growth and increasing population, he emphasized the pressing issues of aging infrastructure and funding challenges. With $50 billion needed over 20 years and a $30 billion requirement for the state highway system alone, innovative financing and timely investments are critical. Prioritizing effective transportation is vital for Minnesota's future, impacting health, the economy, and the environment.

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Addressing Minnesota's Transportation Needs: Challenges and Solutions

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  1. Presentation on Minnesota’s Transportation Needs Charlie Zelle, Commissioner Minnesota Department of Transportation February 10, 2014

  2. Transportation: A Top Tier Issue • Health… • the people • the environment • the economy U.S Bureau of Economics: MN ranked 5th among nation’s fastest growing economies Politico: MN ranked 2nd best state in the nation

  3. Transportation & Economy • What we do today impacts tomorrow: • Population will increase by 1M (2030) • Population is growing and changing • Truck freight increases 30% (2030) • Customers Increasingly value and rely on transportation options • Other states are investing in transportation

  4. Challenges: Aging infrastructure, Harsh climate, Heavy use • 50% state highway pavements are over 50 years old • 35% of MnDOT bridges are over 50 years old • MN 9th most extreme temperature variations in the nation • Interstates in MN rank 38th in the nation

  5. Needs Outpace Funding • Transportation Finance Advisory Committee (TFAC) • $50B in total needs over 20 years, all modes • To achieve an economically competitive system • Funding Needs: • Need $30B for the state highway system alone • Forecasts of $18B capital revenue over 20-years • Risk: • Need revenue source(s) that mitigate inflation risk • Deferred preservation of roads and bridges increases life cycle costs • Federal fiscal outlook increases state’s risk and responsibility

  6. Source: TFAC 2012

  7. Metro Area Multimodal Vision

  8. Financial Risks • Loss of purchasing power, due to inflation • Increased life-cycle cost • Debt ceiling

  9. Timely Investments Drive Down Costs Life Cycle

  10. Trunk Highway Fund Debt Service Forecast - compared to MnDOT PolicyNovember FY2013

  11. Transportation is a Good Investment Return on investment averages 2.5 times that invested • Additional $12B investment over 20 years, yields $31B (average) benefit ROI 2.5 • Project types with the highest ROI: • Active Traffic Management • General Congestion Mitigation • Safety Spot Improvements Source: Smart Growth America Report

  12. Progress with ‘08 Funding

  13. Progress with ‘08 Funding

  14. Adopting new efficiency practices to wisely use state funding, saving money and motorist delays • Performance-based design projects (Hwy 169/494, TH100 near Hwy 7) • MnPASS Lanes • Innovative Construction Methods – Maryland & Hastings Bridges • Both projects benefited from ‘08 (Chapter 152) funding HASTINGS BRIDGE: $120M. New bridge was built next to the old structure to keep the river crossing open to travelers and avoid a 47-mile detour. Original bridge Float down the river 9/12/12 Completed bridge Lifted into place 60 hours later

  15. MnDOT Strategic Priority • Enhancing Financial Effectiveness • MnDOT runs the equivalent of a multi-billion dollar project execution and services business • Focused on being effective, accountable, transparent and efficient

  16. Additional Funding Considerations • Seek a sustainable, long-term solution • Addresses inflation risk • Upholds tenets of user pay • Discussions underway • Apply general sales tax rate to wholesale gas receipts to hedge against inflation? • Restructure Tab Fees? • Redirect sales tax collected on leased vehicles; auto parts, etc. to non-trunk highway transportation needs? • Next generation revenue sources?

  17. Thank you Comments / Questions

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