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Introduction to MnDOT Finances Transportation Finance Advisory Committee May 18, 2012

Introduction to MnDOT Finances Transportation Finance Advisory Committee May 18, 2012. MN Transportation Primary Funding Areas. Department of Transportation (MnDOT) Multimodal Systems (Air, Transit, Freight, Rail) State Roads Local Roads

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Introduction to MnDOT Finances Transportation Finance Advisory Committee May 18, 2012

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  1. Introduction to MnDOT FinancesTransportation Finance Advisory CommitteeMay 18, 2012

  2. MN Transportation Primary Funding Areas Department of Transportation (MnDOT) • Multimodal Systems (Air, Transit, Freight, Rail) • State Roads • Local Roads • Agency Management (includes funding for MnDOT facilities) Metropolitan Council • Metro Transit – Bus, Light Rail and Commuter Rail • Contracted Transit Programs • Transportation Planning Department of Public Safety • State Patrol • Driver and Vehicle Services • Traffic Safety • Pipeline Safety • Administration and Support

  3. MnDOT Transportation Spending Transportation Funds: • Highway User Tax Distribution Fund (HUTD) • Trunk Highway Fund (TH) • County State-Aid Highway Fund (CSAH) • Municipal State-Aid Street Fund (MSAS) • Transit Assistance Fund (TAF) • State Airports Fund General Fund: • Ports • Passenger Rail • Greater Minnesota Transit

  4. 2012-13 MnDOT Appropriations (All Funds, Direct and Statutory)

  5. 2012-13 MnDOT Appropriations (General Fund) (Transportation as a whole receives less than 0.5% of State GF)

  6. Constitutional Authority • Minnesota Constitution, Article XIV • Created all transportation funds • Authorizes taxes on motor fuels, motor vehicle registration, and motor vehicle sales • Dedicates taxes on motor fuels and motor vehicles to the HUTD fund • For motor vehicle sales taxes, dedicates “not more than 60 percent” to the HUTD and “not less than 40 percent” to public transit • Authorizes trunk highway bonds

  7. Dedicated Highway Revenues Constitution requires that the following revenues must be deposited into the HUTD and used for only highway purposes: • Motor Fuels Tax (Gas Tax) – 100% • Vehicle Registration Tax (Tab Fees) – 100% • Motor Vehicle Sales Tax (MVST) – Not more than 60% The current split of the funds within HUTD is: • Gas Tax 48% • Registration Tax 33% • 60% Motor Vehicle Sales Tax (MVST) 19% • Other Sources 0%

  8. Highway User Tax Distribution (HUTD) Fund The HUTD Fund is distributed as follows: • 95% Distribution: • 62% to the Trunk Highway Fund • 29% to the County State-Aid Highway Fund • 9% to the Municipal State-Aid Street Fund • 5% Distribution (5% Set Aside): • 30.5% to town roads • 16% to town bridges • 53.5% to flexible highway account (turnbacks, etc.)

  9. HUTD Sources and UsesFY 2011 Gas Tax $846M Tab Fees $557M Motor Vehicle Sales Tax $276M Other $4M Highway User Tax Distribution Fund DNR 95% Distribution 5% Set Aside THF (62%) CSAH (29%) MSAS (9%) Flexible Highway Account (53.5%) Town Roads (30.5%) Town Bridges (16%) Article XIV of the Minnesota Constitution

  10. Motor Fuels Tax (Gas Tax) • Constitutional requirement: 100% of gas tax revenues must be deposited in Highway User Tax Distribution Fund (HUTD), spent only for “highway purposes” • Current rate is 25 cents per gallon, plus a 3.0 cent surcharge dedicated to trunk highway debt service (this surcharge will increase to a maximum of 3.5 cents on July 1, 2012) • Last increase: 2008 (from 20 cents to 25 cents, plus the 3.0 cent surcharge) • Previous increase: 1988 (from 17 cents to 20 cents) • In FY 2011, the gas tax collected $846 million, or $30.8 million per penny of tax

  11. A History of Gas Tax Changes

  12. MN Gasoline Excise Tax Compared to Neighboring States (April 2012)Data from American Petroleum Institute (API)

  13. MN Gas Tax Rankings vs. Other States(April 2012)Data from American Petroleum Institute (API)

  14. Total Gasoline Taxes by StateData from American Petroleum Institute (API)

  15. Vehicle Registration Tax (Tab Fees) • Constitutional requirement: 100% of registration tax revenues must be deposited in (HUTD), spent only for “highway purposes” • Passenger vehicles pay based upon age and value: • $10 plus 1.25% of base value (subject to depreciation schedule) • Vehicles 11 years and older pay $35 (min rate) • Trucks pay based upon weight and age • In FY 2011, registration tax raised $557 million

  16. Motor Vehicle Sales Tax (MVST) • Until FY 2002, 100% of MVST revenues deposited in general fund • In FY 2002, HUTD began to receive a percentage of MVST • In FY 2003, the legislature eliminated the use of local property taxes for transit operations, and instead dedicated a percentage of MVST to metro and rural transit • 2006 constitutional amendment requires 100% of MVST revenues to be dedicated solely to transportation purposes by FY2012 • Statutory allocation of MVST revenues in FY 2012: • 60% to HUTD, 36% to metro transit, 4% to greater MN transit • In FY 2011, MVST raised $505 million

  17. HUTD Revenue Projections(February 2012 Forecast, actuals through FY 2011)

  18. Trunk Highway Sources of FundsFY2011

  19. Trunk Highway (TH) Fund • The Trunk Highway Fund receives 58.9% of the HUTD revenues (62% of the 95% distribution) • In FY 2011, total revenue to the TH was $1.6 billion, including $971 million from the HUTD and $526 in federal aid • Revenue in the TH is allocated through legislative appropriations. In FYs 2012-13: • 84% to MnDOT for construction and maintenance activities • 6% to the Department of Public Safety (State Patrol) • 10% to debt service

  20. Trunk Highway Bonding • Proceeds only used for “trunk highway purposes,” must be deposited in Trunk Highway Fund • MnDOT Debt Management guidelines: THF debt service should not exceed 20% of annual state revenues • Debt service on Trunk Highway bonds paid from the Trunk Highway Fund • Article XIV, Section 11 of the Minnesota Constitution

  21. Non- TH Transportation Bonding • General Obligation (GO) Bonds: • Used to fund non-trunk highway transportation projects, such as transitways, commuter rail, local bridges and roads • Debt service on General Obligation (GO) bonds paid from the General Fund

  22. Federal Transportation Funding • Federal Aid Highway Program is a reimbursable program and allocated to MN cased on formula • Reimbursements for trunk highway projects are deposited into the Trunk Highway Fund’ • FY 2011 federal revenues to the TH were $525.5 million • Separate federal funding is allocated for transit, rail, aeronautics and local road projects; these amounts are primarily deposited into the state’s Federal Fund

  23. Department of Public Safety DPS also receives a significant amount of their funding from the TH Fund for the following activities: • Driver and Vehicle Services • Fee-based operations budget (two operating accounts in Special Revenue Fund) • State Patrol • Funded primarily from trunk highway fund • Capitol Security funded from General Fund • Vehicle Crimes Unit (2010) funded from HUTD Fund • Traffic Safety • Funded through special revenue and trunk highway appropriation (required match for federal funding) • Pipeline Safety • Funded through USDOT grant and through pipeline safety inspection fees • Administration

  24. Trunk Highway Policies • Debt Service • Cash Balance • Fund Balance • Advanced Construction

  25. State Aid Sources of FundsFY2011

  26. County State-Aid Highway Fund • The County State-Aid Highway (CSAH) Fund receives 27.55% of the total revenues in the HUTD (29% of the 95% distribution) • In Chapter 152, an additional formula was created to govern distribution of new revenues attributable to that legislation, called the “excess sum:” • 40% based on share of vehicle registrations • 60% based on construction needs

  27. County State-Aid Highway Fund • A portion of motor vehicle lease sales tax (MVLST) is statutorily dedicated to greater MN transit, after offsets to the General Fund; • received $5.2 million in FY 2011 (first year this money was received), projected to receive $5.8 million in FY 2012, increasing to $9.0 million in FY 2015 • The CSAH revenues are distributed to the state’s 87 counties through a statutory formula as follows: • 10% equally to each county • 10% based on each county’s proportional share of vehicle registrations • 30% based on each county’s proportional share of CSAH lane-miles • 50% based on each county’s share of 25-year construction needs

  28. Municipal State-Aid Street Fund • The Municipal State-Aid Street Fund (MSAS) Fund receives 8.55% of the HUTD revenues (9% of the 95% distribution) • The MSAS revenues are distributed to cities with a population over 5,000 (currently 142 cities) through a statutory formula as follows: • 50% based on each city’s population • 50% based on each city’s 25-year construction needs

  29. Multimodal Programs Aeronautics Transit Freight & Commercial Vehicles Passenger Rail

  30. Aeronautics • Funded, with dedicated revenues from: • aviation fuel taxes • aircraft registration fees • property taxes from private hangars on public airports • Provides operating, maintenance, and construction grants to 135 public airports • State funding is by direct appropriation

  31. Transit Assistance Fund • Funds in the TAF are statutorily appropriated to the Metropolitan Council and Commissioner of Transportation, to be used “solely for transit purposes.” • The Transit Assistance Fund (TAF) receives a portion of MVST (40% in FY 2012 and thereafter): • 36% to metropolitan transit assistance account (90% of 40%) • 4% to greater Minnesota transit assistance account (10% of 40%)

  32. Transit Assistance Fund • A portion of motor vehicle lease sales tax (MVLST) is statutorily dedicated to greater MN transit, after offsets to the General Fund • MVLST Revenue: • $5.2 million in FY 2011 (first year this money was received), • Projected to receive $5.8 million in FY 2012, increasing to $9.0 million in FY 2015

  33. MnDOT Transit Uses of Funds FY2011

  34. MnDOT Transit • Provides operating and capital grants to local units of government for transit services in Greater MN • Operates large parking ramp for car poolers in Minneapolis where parking fees offset construction, maintenance, and operating costs • Feds provided 46% of total funding in FY 2011 • At $15M in both FYs 2012 and 2013, Transit has the largest general fund budget in MnDOT

  35. Freight and Commercial Vehicles • FY 2012 and 2013 direct appropriations • Trunk Highway Fund: $4.897 million per year • General Fund: $0.257 million per year

  36. Passenger Rail • FY 2012 and 2013 direct appropriations • General Fund: $0.500 million per year • Appropriation started in FY10 and FY11 • Federal Funds: • $1.6M in FY 2012 • $0.5M in FY 2013 • $26M in GO Bonds appropriated in 2009.

  37. Contact InformationTracy HatchChief Financial Officer651-366-4811Tracy.Hatch@state.mn.us

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