1988-007 Council Resolution - Laserfiche WebLink

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Page 3 • for the 1988 -89 biennium to its level before the August, 1987, project deferrals were announced, and • • (2) the restoration of state public transit assistance at least to its 1986 -1987 level. In both these areas the fundamental issue is one of commitment. The first responsibility of the legislature in financing transportation should be to avoid retreating on the state's commitment to a highway system adequate to sustain economic development in Minnesota and a transit system which provides a basic level of mobility for a substantial portion of the state's people. Both those objectives have been compromised by recent legislative actions. The reasons for those actions need not be debated here, but we feel that it is now time for the legislature to resolve, or at least alleviate, the problems raised by those actions. Only when the cutbacks of recent years in both highways and transit have been addressed can the legislature begin seriously to restore its full commitment to an adequate transportation system. The magnitude of the cutbacks in the highway development program did not become fully apparent until August, 1987, when the Department of Transportation announced that 36 highway projects with a total cost of about $96 million, originally scheduled for contract letting during the 1988 -89 biennium, would be indefinitely postponed. These deferrals were made unavoidable when the 1987 legislature reduced from 50% to 5% the share of Motor Vehicle Excise Tax (MVET) revenues going to transportation in this biennium. This had the effect of reducing the Trunk Highway Fund's share of the MVET revenue from about 23% to about 2 %, requiring a cutback in the highway improvement program. A failure to increase the share of MVET revenue going to transportation in the 1990 -91 biennium beyond the 5% level (a 75% level was provided in the original MVET transfer legislation) will necessitate another round of project deferrals, amounting to approximately $150 million, in that biennium as well. The present level of state assistance to public transit is also characterized by cutbacks which, while perhaps less dramatic than those in the highway area, nonetheless are symptomatic of a declining state commitment to transit. Appropriations for transit assistance for the 1988 -89 biennium were some $500,000 less than actual state spending for the same purposes in the previous biennium, and some $3 million below the original appropriation for that biennium. This continues a pattern of maintaining state support for transit at an essentially unchanged level throughout the 1980s, a pattern which when combined with flat farebox revenue and declining federal aid has made transit throughout the state increasingly dependent on property taxes to meet rising costs. The opportunity to attract new riders to transit and to make it more effective in meeting the transportation needs of rapidly - growing areas is being lost. At a time when Minnesota is making major efforts to enhance economic development in all parts of the state a transportation program which is characterized by reductions, delays and uncertainties is clearly counterproductive. The first step toward making transportation part of the solution instead of part of the problem must be to take major steps toward restoring the cutbacks of the past year. To help accomplish this the Commission recommends the following actions: Recommendation No. 1, The state gasoline tax should be increased by three cents per gallon, effective June 1. 1988, The gasoline tax has been the foundation of state highway financing for over fifty years, and we believe it is an essential part of any highway financing package in 1988 as well. The gasoline tax is the one tax where payments for most taxpayers are most closely related to actual highway use, so that it is widely viewed not simply as another tax but as part of the overall cost of motoring. As long as the gasoline tax is dedicated solely to highway purposes it has widespread public acceptance, and we believe that the public is willing to pay such a tax as the price of improving the highway system to meet the demands of its users.