4D, Resolution Supporting League of MN Cities Transportation Funding Policy

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League of Minnesota Cities 2008 Transportation Funding Policy Statement Issue: The League of Minnesota Cities recognizes that all Minnesota residents and businesses benefit from a sound transportation system that offers diverse modes of travel. Current funding for roads, bridges and transit systems across all government levels in the state is inadequate, and Minnesota's transportation system is failing to meet needs pertaining to public safety, population growth and economic development. Due to funding challenges, the state has delayed regionally significant road construction and reconstruction projects. Urban areas are experiencing growing congestion and are lagging behind other regions in making transit investments. Rural roads are not being upgraded to meet modern safety standards and are not serving the needs of industries that depend on the ability to transport heavy loads. Local roads, bridges, sidewalks and trails are critical components of Minnesota's transportation infrastructure. Cities, like the state, have inadequate resources to preserve and reconstruct aging transportation infrastructure, and to build transportation infrastructure to serve new development. Existing funding mechanisms such as municipal state aid (MSA), special assessments and bonding have limited applications, making it difficult for cities to address growing needs. Further, as the state funding shortfall has grown, the trunk highway project cost participation requirements imposed on local units of government have increased dramatically. This burden has been exacerbated by the state's use of trunk highway bonds as a funding source, because under Minnesota's constitution, trunk highway bond dollars cannot be spent on local components of trunk highway projects, and the bond dollars are not distributed through the Highway User Tax Distribution Fund formula. Cost participation requirements put added pressure on local budgets, contribute to property tax increases and divert local resources from the over 39,000 lane miles in Minnesota under municipal jurisdiction. Response: More resources must be dedicated to all components of the state's transportation system, and local units of government must have access to resources and funding tools to meet growing needs. The League of Minnesota Cities supports the following: . acceleration of the phase-in of the constitutional dedication of 100 percent of the motor vehicle sales tax (MVST) to transportation purposes; . MVST distribution of 60 percent for roads and bridges, and 40 percent for transit; . dedication of the sales tax on leased vehicles to transportation purposes; . a permanent increase in the gas tax; . iudexing of the gas tax, provided there is a limit on how much the tax can be increased for inflation in a given amount of time; . increases in vehicle registration taxes (tab fees); . trunk highway bonding, provided the Legislature implements reasonable restrictions on the amount of debt service the state will incur, and provided the Legislature appropriates funding to assist with local costs related to projects funded with trunk highway bonds; . general obligation bonding for local roads and bridges, particularly for routes of regional significance; . a sales tax increase to fund transportation needs;