Minnesota Transportation Funding (General)

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DanPatchToget
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Re: Minnesota Transportation Funding (General)

Postby DanPatchToget » March 29th, 2017, 11:13 am

How much does the state contribute for operating expenses of the A Line and the Red Line? Will the state contribute operating expenses for planned BRT and/or ABRT projects?

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Anondson
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Re: Minnesota Transportation Funding (General)

Postby Anondson » March 31st, 2017, 1:59 pm

There may be a better thread than this, but...

The bridge fire in Atlanta got me thinking that we have not emphasized enough that unforeseen catastrophe can happen closing down a vital link in the highway network, or a portion of it, and having versatility for residents to get around is a valuable thing. Roads and rail together build a more resilient network, when one link is out the other can pick up some slack, but throw entirely in on highways and when it fractures there is little to be done.

After the 35W bridge collapse we should know this well, but maybe because of our well formed highway grid it we made it through well enough. Detour 35W to 694/94 or 280, and after a few tight months we endured.

With the I-85 overpass out in Atlanta, I'm trying to think if there are links like that where a highway outage in the Twin Cities is just as fragile to a wide area. Like the 394 viaduct, could 35W and 55 fit all that traffic detoured if it came down unexpectedly?

Is there a component to the highway network that is so critical that it's loss could not have slack picked up? This is more thought experiment than anything else, where is the Minnesota highway network as fragile as this part of Atlanta, or is it?

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Re: Minnesota Transportation Funding (General)

Postby acs » March 31st, 2017, 2:42 pm

It'd have to be somewhere that would affect two freeways at once. I think our network is redundant enough to overcome shutting down one single freeway even if it's I-94.

Most catastrophic would be I-35W and 494 interchange, I-94/35W commons south of downtown, then probably crosstown commons or 35E/94 in St. Paul.

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EOst
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Re: Minnesota Transportation Funding (General)

Postby EOst » March 31st, 2017, 3:07 pm

I imagine any part of the downtown loop--especially the southern leg--would have dramatic effects if it were shut down. Something like the Lowry Hill tunnel collapsing, or (as acs mentioned) the 94/35 commons.

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Re: Minnesota Transportation Funding (General)

Postby David Greene » March 31st, 2017, 3:14 pm

The new Stillwater bridge, of course!

DanPatchToget
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Re: Minnesota Transportation Funding (General)

Postby DanPatchToget » April 2nd, 2017, 7:52 pm

https://www.youtube.com/watch?v=L7-UUxptw5M
https://www.youtube.com/watch?v=7nkJKMvK3Yk

Seems SEPTA was in similar predicaments in the 1980s as Metro Transit faces now (besides the corruption part, at least we don't have that!)

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Tiller
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Re: Minnesota Transportation Funding (General)

Postby Tiller » April 5th, 2017, 9:40 am

Interesting anecdote about public vs private infrastructure ownership.
https://mobile.nytimes.com/2017/04/04/o ... ebook.com/

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Re: Minnesota Transportation Funding (General)

Postby Silophant » June 13th, 2017, 10:13 pm

Via talindsay: Hennepin and Ramsey Counties raise transit tax. Special comment preview: this extra quarter percent will break the backs of the long-suffering Real Americans and cause them all to move to Florida or wherever.

I'm as big of a fan of regionalism as anyone, but I see this as generally a good thing. If the worst-case scenario happens and the feds do pull the carpet out from under the LRT extensions, I feel like Hennepin County will be better able to cope with a sudden change in plans like that than the entirety of (the) CTIB.

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Re: Minnesota Transportation Funding (General)

Postby Vagueperson » June 13th, 2017, 10:21 pm

Hennepin County maybe, but Ramsey County?

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Re: Minnesota Transportation Funding (General)

Postby Korh » June 15th, 2017, 1:48 pm

you know I've kind of been wondering why they go with a sales tax increase rather then a real estate or something since one of the main benefits to a new transit lines is that they are a magnet for new economic development around it. But then again I know absolutely nothing about how MN tax works so I could be wrong.

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Re: Minnesota Transportation Funding (General)

Postby David Greene » June 15th, 2017, 2:35 pm

If the state allows it, it's politically easier to raise sales taxes than property taxes. Not the only reason but an important one.

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Re: Minnesota Transportation Funding (General)

Postby RailBaronYarr » June 16th, 2017, 8:08 am

Which is crazy since sales taxes are more regressive than property taxes, and they can be crafted to hit the land most positively impacted by infrastructure rather than hitting everyone, but whatever.

intercomnut
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Re: Minnesota Transportation Funding (General)

Postby intercomnut » June 16th, 2017, 9:53 am

Another benefit of a sales tax is that it captures revenue from people visiting the area. Many of them use/benefit from our transit system. This way, they help pay for it.

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Re: Minnesota Transportation Funding (General)

Postby David Greene » June 16th, 2017, 9:58 am

RailBaronYarr wrote:
June 16th, 2017, 8:08 am
Which is crazy since sales taxes are more regressive than property taxes, and they can be crafted to hit the land most positively impacted by infrastructure rather than hitting everyone, but whatever.
I think that would be counter-productive. For transportation projects we want as wide a tax base as possible for stability and growth. Upper-crust housing has not seen the kind of value increase mid-level housing has seen, for example.

The feds want to see stable funding, #1. They know these projects take a decade or more to plan and build.

I think a tax on property value increase proximate to a project is a good idea, I just don't think it should make up the funding base.

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Re: Minnesota Transportation Funding (General)

Postby MNdible » June 16th, 2017, 10:04 am

If you're in an area where property values are increasing, property taxes can be extremely regressive for longtime owners.

RailBaronYarr
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Re: Minnesota Transportation Funding (General)

Postby RailBaronYarr » June 16th, 2017, 11:08 am

Forgive me if I have less sympathy for the longtime owners whose mortgage is either paid off or insanely low due to the purchase being made 15-20+ years ago. If you're a moderate- or low-income homeowner (say, your home is worth $150k) and the value of your home rises by 50% over a few years (far more than any study has shown LRT improves nearby property values). What are we talking about for an annual property tax increase? $1,000 more a year? That's not chump change, but it's also likely your mortgage as a share of income has dropped over the previous decades you've owned the house (rising income and/or mortgage is paid off).

Keep in mind, this is the scenario that matters - because property values could go up but taxes stay relatively flat if *everyone's* property taxes are rising. You'd need to increase the levy or see your value go up by 50% more than the average. And we should have ways to mitigate those issues (defer tax increases until when you sell). The state could use more progressive income taxes as property tax refunds (and also at least make renter tax credits equivalent to owner's).

I'm not saying a diverse funding stream that uses a mix of more progressive taxes with less progressive ones shouldn't be the case. But sales taxes are more regressive than property taxes, and they can also be levied broadly (there's nothing saying we HAVE to use only value capture near transit). Increasing the sales tax by another quarter cent will cost low income households money, too. And.. are property taxes (set by the levy, not necessarily property value) any less stable than sales taxes, which rise/fall much closer to the economy?

It's also maybe good to acknowledge that a big reason we don't have places that make transit (and biking, etc) natural investments - and why we're constantly trying to find odd funding sources (MVST of someone buying a car in Virginia, the sales tax of someone in St Michael) to build transit where they won't use it - is because we don't make the underlying funding stream for public infrastructure rely on the value it provides. And sometimes, those things might seem facially regressive. And that maybe sometimes the strings attached with federal dollars ("wanting stable funding streams") could be challenged.

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Re: Minnesota Transportation Funding (General)

Postby MNdible » June 16th, 2017, 12:09 pm

You raise some valid issues, but I guess I'd argue that Minnesota's sales tax, with exemptions for food, clothing, and medical services isn't too terribly regressive. And obviously housing, the biggest expense in every household's budget, is not subject to sales tax.

Somebody check my math here, but let's say that a low income family spends $10,000 on things that are actually subject to the sales tax (and that's probably quite high). The added sales tax would add up to a not-too-back-breaking $25.

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Re: Minnesota Transportation Funding (General)

Postby David Greene » June 16th, 2017, 12:28 pm

It's a good point about a levy being stable. I was responding to the notion of value increase capture, which is not as stable.

I have a lot of sympathy for property tax increases on longtime owners if said owners are on fixed incomes, which many of them are because they're retired.

If we defer increases until sales, that makes the tax less stable for transportation funding purposes.

Complain all you want about the feds wanting to see stable revenue, but if I were doling out billions of dollars for projects, I'd want to be sure the local match is secure too, especially with the long timelines of these projects.

Minnesota's sales tax would be even less regressive if we taxed clothing and services. This has been studied.

Sales tax for transit is not an "odd funding source." It's the norm across the country. That doesn't mean it's the best possible way to do it but it's very common and people (i.e. the feds) are comfortable with it. That's a huge, huge part of this.

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Re: Minnesota Transportation Funding (General)

Postby RailBaronYarr » June 19th, 2017, 9:50 am

The sales tax is incredibly regressive: https://itep.org/whopays/minnesota/ - statewide sales/excise taxes hit the bottom 20-40% income quintiles far harder than property taxes do as a share of income (yes, this particular analysis lumps excise and business sales/excise taxes passed on to consumers with the rest).

While a 0.25% increase by itself may only be a small levy on an individual family, taken as a whole our sales taxes hit low-income people the hardest. Maybe you can make the case that individual sales taxes dedicated to specific government spending reduces this regressive-ness by ensuring the regressive-taxes are spent on progressive products (as opposed to lumping it in a general fund which may or may not be spent in a similar way, although the bulk of our state's general fund is spent on pretty progressive stuff like education and healthcare).

Deferring increased property taxes is only less stable in the short-term. Long-term, you'd have a steady stream of deferred property taxes coming due while you're currently deferring new ones. And in any case, that's only one policy prescription. I differ from you that retired folk sitting on a paid-off home with rising value is 1) a relatively small share of all properties (lot of rich retired or currently-working folk owning their homes who could afford the hit), 2) they can still sell their asset at a windfall (also allowing for quicker redevelopment of station areas). Maybe leaders should take the tough stance that longtime owners of single family homes with no kids anymore (let's be honest, this is the majority of the cases) isn't the best use of that parcel (either a family could use that structure, multiple renters, or it could be redeveloped). I also disagree that a value capture increase isn't stable - do you believe real transportation infrastructure has lasting appeal or not?

I hate sounding like a Strong Towns record on repeat, because boy I have a lot of issues with them. But just because everyone else in America does it doesn't make it a good funding policy. Just because the Feds are comfortable with it doesn't justify it (or all the project requirements they add on, which dilute the effectiveness of a transit project per dollar, whether the feds are paying or not). We could look at any number of other countries that build better transit, for less per mile/station, with more riders, still with federal money making up a significant chunk of the budget... and see that they rarely use sales taxes.

We've backed ourselves into a corner where the easiest path to securing the local share for transit is through sales taxes (also some HCRRA money backed by property taxes - I like this!) rather than the harder (but better in terms of outcomes) path where we fight for a mix of value capture, gas taxes, tolls, general city/county property taxes - a mix that discourages driving, encourages denser development and less sprawl. Right now, we'll build our two light rail lines, a hybrid streetcar Riverview, and some many-hundred-million dollar BRTs and in 20 years still wonder how offices, warehouses, retail, and single family homes continue alongside new or expanded freeways into Waconia and St Michael and East Bethel.

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Re: Minnesota Transportation Funding (General)

Postby exiled_antipodean » June 19th, 2017, 2:15 pm

For better or worse one of the appeals of the sales tax route is that it is collected in very small increments that are barely noticeable, rather than arriving in a big envelope with colored paper and a bill for a large sum. Even if that large sum is then spread across monthly mortgage payments, or otherwise made easier to pay in smaller increments.

Totally agree that it breaks a lot of links between value, revenue, and also in some ways political accountability for decisions.


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