Will it take special sales tax to move forward on Highway 23?
WILLMAR -- Would residents in Kandiyohi County be willing to pay a special sales tax to speed up the process of making state Highway 23 a four-lane route all the way to St. Cloud?
It might be a hard sell, but it's one of a number of proposals that could someday be placed on the table as the Minnesota Department of Transportation explores innovative financing options for transportation needs.
Members of the Willmar Lakes Area Chamber of Commerce's Highway 23 Task Force got an early look at some of the ideas the department is considering, and will be outlining in more detail when it invites representatives from corridor coalitions across the state to a forum on Dec. 2 in Brooklyn Center.
There is currently a "gap'' of more than $2 billion a year between the state's transportation needs and its resources, Jon Huseby, District 8 engineer for MnDOT, told local task force members at a meeting on Friday in Willmar. Most of the state's transportation funding is directed at preserving the existing infrastructure. It is increasingly difficult to find funds for expansion projects, he said.
It could get more difficult in the years ahead. The department is close to reaching its cap on bonding for transportation projects. The debt service on transportation bonds can be no more than 20 percent of the transportation revenues, according to Brad Larsen, MnDOT's director of traditional and innovative finance.
Larsen said the solutions being explored by MnDOT include finding new sources of revenue, new partnerships, and new or innovative financing sources.
One step in this new direction will be taken yet this year, when MnDOT launches a pilot project awarding $40 million for interchange projects that leverage private investment.
MnDOT had sought legislation during the last session of the Legislature to allow alternative financing options, but was unsuccessful.
It's considering taking the issue back to the Legislature.
Larsen pointed out that a number of states have already used alternative financing options to complete road projects that otherwise would still be on drawing boards.
Missouri allows the creation of transportation districts that can impose a local sales tax for road projects with voter approval. A half-cent sales tax made possible a 52-mile, $80 million expansion of a two-lane highway to four lanes between Macon and Hannibal.
In Texas, local governmental units have fronted the costs for a number of different road projects, according to Larsen. A $219 million project in Montgomery, Texas, was launched with $186 million in funds from the county and $33 million from the Department of Transportation.
The state of Texas will reimburse the county for the principal of its debt in upcoming years at a rate based on the annual traffic volume. The interest costs remain the local government's responsibility.
Other alternative financing options being explored range from toll roads to expanding the MN Pass system that allows lone occupant drivers to pay for using high-occupancy toll lanes.