
Research: Minnesota Transportation Funding Redistribution

Transportation funding comes from federal, state, and local levels of government. While taxes directly generated by local governments stay in those jurisdictions, federal and state transportation funding may be collected in one area and redistributed to others.
TPEC researchers continued their study of transportation funding redistribution in Minnesota. The most recent analysis, published in 2022, looked at the six-year period between 2015 and 2020.
The team found that the Twin Cities Metro district contributed more than it received: It contributed about 50 percent of federal and state transportation revenues and received about 45 percent back in expenditures. District 3, in the central part of the state, also received less than it contributed. All other districts received more than they contributed, probably due to much lower population density in these counties.
The team also found that local governments fund a huge proportion of the transportation infrastructure in Minnesota—primarily through the property taxes they collect. During 2015–2020, federal and state special revenues accounted for about 50.4 percent of total transportation funding in Minnesota, while local efforts accounted for about 49.6 percent. (During 2010-2015, local efforts accounted for about 45.5 percent.)
The team’s transit analysis showed that about 55 percent of public transit expenditures in Minnesota came from federal and state special revenues. Fare revenue paid for about 13 percent of expenditures, while other local efforts covered about 32 percent. Overall, Metro District counties received almost 90 percent of total public transit spending in Minnesota.