Update to Governor Dayton October 2012

1. Update to Governor Dayton October 2012

2. Purpose • Better Government for a Better MN • TFAC was formed to provide a bold funding proposal to address the state’s transportation needs for the next 20 years. • To maintain Minnesota’s high Quality of Life • To remain economically competitive in a global economy • TFAC Charge • Identify potential revenue sources • Seek both traditional and non-traditional approaches • Consider opportunities for public-private partnerships to finance investments in transportation

4. Three Funding/Financing Scenarios Considered • Status quo • Maintaining current performance • World Class/Economically competitive transportation system • 10.15.12 TFAC selected scenario 3: “World Class” as the targeted funding level necessary for MN

5. Twenty Year Funding Needs to Achieve Desired Outcomes(20 Year Needs in $ billions; 10-31-12) AFG = Annual Funding Gap

6. TFAC Funding Options (10.15.12) • System Proposals: • Fuel Tax: • Increased gas tax and all other special fuels, proportionally • Indexing of the gas tax rate, adjust it annually with inflation • Sales tax on fuel • Sales Tax: • Local options sales tax increase for 80 GM counties, with no referendum • Metro sales tax increase for transit above current amount • Leased vehicle sales tax with 100% of proceeds to transportation • Registration Fees: • Motor vehicle registration fee increase

7. TFAC Funding Options (10.15.12) • Local Focus: • Transportation Improvement Districts, local government options for transportation • Value capture for development around transportation improvements • Project Focus: • Revise MnPASS strategy and expand the system to leverage revenue • Tolling/P3’s (e.g., New River Crossings, etc.)

8. TFAC Funding & Financing Principles • High Return on Investment • Economic Efficiency • Job Growth and Economic Development • Transparency • Quality of Life • Equitable • Strategic • Balance Market and Public Roles • Mobility and Safety • Reliable and Sustainable • Marketable to the Public

9. Example World Class Transportation System Projects: • TH 610 Completion • TH 14 Nicollet to New Ulm • TH14 Dodge Center to Owatonna • TH 23 from Paynesville to Richmond • TH 169 from Taconite to Pengily • TH 10 Wadena Bypass • TH 23 New London to Paynesville • TH 371 Jenkins to Pine River • Metro Congestion relief on: • 35E, 394, 100, 94, 252, 36, 35W, 494, 169, and 77 • TH 61 in Red Wing • TH 55 Mendota Bridge (Historic) • TH 43 Bridge over Mississippi River • Installing Cable Median Barrier along 94 – in Detroit Lakes • Rural conflict intersection warning systems at 50 locations around the state

10. TFAC Next Steps • Next Meeting October 31, 2012 • Evaluate funding options and propose ideal mix of revenue strategies • Present to Governor on November 15, 2012 • Refine proposal – November 19 TFAC Meeting • Develop Marketing and Communications Strategy

12. TRIP Report • TRIP produces national and state reports on the condition and investment needs of a state’s transportation infrastructure. • In Minnesota, TRIP is creating a report listing, evaluating, and ranking the top 100 unfunded transportation needs   • MnDOT is working with TRIP in partnership with the Minnesota AGC, Transportation Alliance. • Report highlights needs in multiple categories: Preservation, Congestion, Bridges, Safety, Regional Priorities and Transit.

13. High Return on Investment (HROI) • Achieve most benefits at a much lower cost • Use other funded projects (i.e. preservation, bridge replacement) to leverage resources • Maximize use of existing right-of-way (ROW) • Benefits include bottleneck relief, improved geometrics, address safety hazards, shortened implementation timelines and money can be spread to more projects

14. The High ROI approach is focused on: • Performance and Outcomes • Lower Cost, High Benefit • Safety • Technology • Risk Based Analysis Approach • Enhanced Quality of Life

15. Marketable to the Public TFAC Surveys Using MnDOT’s Online Customer Community • 400 MN Residents • Census alignment (age, income, geography, education, gender) • Surveys or Discussions sent out weekly • Online Interactions • Timely, nimble feedback not precise • Provides useful, directional feedback • Two surveys, in three weeks to help inform TFAC (~200) • Perceptions of future funding needs • Reaction to 10 potential funding options

16. Of the 10 possible funding options described, a tiered response emerged. Most favorably viewed options: (Ranked: most favorable) Least favorably viewed options: (Ranked: least favorable) Mileage User Fee General Sales Tax Adding Toll Roads Property Tax Local/Regional Tax Income Tax Vehicle Registration Fees Motor Vehicle Sales Tax Motor Fuel Tax Sponsorships

17. Minnesotans’ describe an end state with and without adequate funding. If transportation is adequately funded over the next 20 years, it will be safer, roads and bridges will be maintained, there will be more transportation choices, traffic congestion will be reduced and this state will be prepared for and able to support growth in BOTH commerce and population. Inadequate funding over next 20 years Adequate funding over the next 20 years • Safe transportation • Roads appropriately maintained • Safe/well maintained bridges and other infrastructures • Additional options/choices for transportation • Increase in light rail • Suitable public transportation for senior citizens, and residents in general • Reduced traffic congestion • Minnesota will attract more people and business – further boosting the state economy • “ • Safety conditions will be diminished • Bridges and other infrastructure not be properly maintained (unsafe bridges, gravel roads) • Fewer options/choices for public transit • Minnesota will be less competitive in the region • Lack of innovation in transportation • Increasedcongestion levels • “

18. Despite uncertainties over current funding levels, half are confident that Minnesota will have adequate funding for its transportation needs in the next 20 years. Optimism stems from the perception that MnDOT is being proactive with future planning and innovation and the volume of work witnessed. Others point out that Minnesota is a highly taxed state and should therefore have all the necessary funding.