The network of highways and local roads is essential to the state's economy and the daily activities of Minnesota residents. Maintaining, expanding, and operating this infrastructure is a major expense for the state and local governments inside Minnesota. Generating sufficient revenue for highways and streets remains a major challenge, and recent revenue projections estimate a shortfall of $20 billion in necessary funding between 2023 and 2042, for the state highway system alone.
In a newly published TPEC report, Minnesota Roadway Funding: Revenue Sources & Distribution, researchers Camila Fonseca-Sarmiento and Jerry Zhao and research assistant Matthew Land detail these transportation funding sources and explore how roadway funding is generated and distributed, as well as the history of current funding mechanisms. In doing so, they aim to enhance the understanding of Minnesota’s roadway financing structure, which is critical for anticipating and addressing future transportation challenges.
In the first update since July 2020, the new report includes projections of the impact of new revenue sources added through the 2023 legislative session: a retail delivery fee and a regional transportation sales tax.