Road Infrastructure 101 Part II – Who Pays

This post is the second in a three part series on MN road infrastructure, use, and funding.  Part I can be read here, check back for the finale over the next week.
 

Bill’s latest post highlights the nature of educated and well-meaning folks’ lack of real data to back up certain opinions when it comes to transportation networks, costs, and funding.  In my previous entry, I bored everyone to death (including myself) by rattling off a bunch of road statistics, from lane miles to VMT by vehicle type.   The main takeaways for me were: 1) the majority of pavement in the ground is local streets and roads, and 2) individual users make up the vast majority of statewide road use.  Keep these in mind as we explore the current funding mechanisms for MnDOT and cities across the Land of 11,842 Lakes.

I’ll admit, digging into this information is no small feat, and on the surface it would seem MnDOT basically covers its expenses with user fees.  Glancing at the MnDOT budget overview, direct user fees (page 17) were pretty close to non-multi-modal expenditures (page 12) in 2012.  But MnDOT isn’t the only one paying to build, maintain, operate, and police them – about 50% of our pavement is wholly controlled by local municipalities.

I had to go back to 2010 find detailed data from all government levels to make a fair comparison.  Local highway expenditures and revenue sources are reported each year and include all municipal street and road costs (according to the instructions provided by the FHWA), broken down by city, county, and township.  This gives us insight to how much is spent on roads from property taxes, general fund appropriations, local debt, and much more.  A detailed look at MnDOT’s 2010 revenue and expenses can be found here[pdf].

I’ll spare readers the task of looking at numbers and tables (if you want my data to peer review, let me know in the comments!).  When you boil out the total MN road spending by revenue source and split them by user-paid/subsidized, you get:

Only one pie chart this time, sorry folks.

Only one pie chart this time, sorry folks.

Blue shaded areas represent user fees, while red/orange come from other sources.  Here’s the only number that matters: 46.5%.  46.5% of all MN street and road spending is covered by user fees.

But wait!  As Bill’s relatives point out, transit (and other modes) are stealing road user fees to pay for their operation and construction!  This is… partially true – as of 2012, 40% of the MN motor vehicle sales tax[pdf] (MVST) is taken out to support statewide transit systems (the vast majority goes to Metro Transit), and roughly 24% (2011) of the federal gas tax went to support multi-modal system distribution.  Many just stop the line of reasoning there and assume it explains the shortfall. In reality, if that money was redirected back to highway spending, user fees bump up marginally, only covering 51.1% of the total system costs (again, 2010 only). [For reference, annualizing Blue Line construction costs over 30 years and adding it to 2012 operations costs yields just over 14% in farebox recovery for our single LRT line]

Of course, this is only direct costs of roads.  It’s not difficult to identify costs associated with our transportation network outside building, patching, plowing, and lighting:

Indirect Costs

Opportunity Costs

  • Taxable land value under highways and streets
  • Value of transportation spending to other government functions or deficit/debt reduction
  • Value of energy used for transportation to other economy-wide functions

External Costs

  • Environmental and municipal costs of rain and snow runoff from streets
  • Social cost of carbon (CO2) [if you believe in a ~$45 per metric ton CO2 as I do, MN drivers cost society roughly $967 million just in tailpipe emissions, to say nothing of the CO2 emitted in oil production, concrete/pavement production, etc]
  • Non-CO2 GHG emission social costs
  • Traffic noise (impacting both property values and mental health of nearby residents)
  • Congestion – in this I personally only include congestion incurred by freight and other businesses where time lost actually impacts cost or revenue structures

Deaths/Injuries

  • 395 killed, 29,314 injured on MN roads in 2012[pdf]
  • Early deaths due to vehicle emissions – estimated at 55,000 2005 nationwide

These numbers are very difficult to quantify (and I have a difficult time with monetary costs of death and injury), especially at a city or state level, and will therefore have much higher uncertainty.  I am confident, however, that these values are non-zero and significant enough to alter how we view different modes of transportation, their costs, and who currently pays for them.

Of course, trains, buses, bikes, and even walking all have some level of external costs.  Trains run on electricity (mostly), buses burn diesel, bikes require paved trails and lanes, feet require sidewalks.  People die on trains, cyclists have sometimes injured pedestrians, and all modes take up varying amount of build-able land while emitting noise and vibration. Our challenge is to pragmatically and holistically evaluate these costs when deciding what investments in transportation (and associated land-uses) we make – something I’ll try to (briefly) lay out in the final post.


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6 Responses to Road Infrastructure 101 Part II – Who Pays

  1. Bill Lindeke
    Bill January 3, 2014 at 6:28 pm #

    This is so great! +21000! This is kind of thing I wish I could write but don’t have the detail or know how. What about traffic enforcement and snow plowing?

    • Alex Cecchini
      Alex Cecchini January 3, 2014 at 7:25 pm #

      I believe the FHWA reporting rules dictate local reporting includes all maintenance/ops (snow plowing, traffic lights, etc). To be fair, I’m sure some people could claim that traffic fines (included) count as a “user fee” – I don’t, it’s just a fee for breaking a law.

      I’m also pretty sure the state highway funds include Highway Patrol. I’m not sure if the local reporting includes the share of local PD/FD costs associated with a vast car-only landscape or not. Might be hard to calculate, honestly, since even a city like Paris has at least some cops on wheels. But it’s also safe to say a city like Paris or Tokyo spends less on capital equipment – these emergency vehicles are pretty tiny but functional: http://www.tfd.metro.tokyo.jp/ts/soubi/car/index.html Either way, I’d say that’s definitely in the “indirect cost” category, since we’d still need police, fire protection, etc, but it would just be cheaper to provide.

      I just wanted to put together a no nonsense post on how much user fees really cover in our home state for people to point to when needed.

      • Matt January 4, 2014 at 5:33 pm #

        Speaking of snow plowing…. we’ve often engineered our street and road networks for the sake of providing “necessary” snow storage and ease of plowing. But this ends up creating a land use that’s less efficient. It may cost half as much to plow a stroad with snow storage compared to a traditional street, but you suddenly have twice (or multiples more) linear feet of street to plow. So how efficient is that?

        Certain land uses, served by certain types of streets, justify snow removal rather than “cheap” snow plowing or snow storage.

  2. Janne Flisrand
    Janne Flisrand January 4, 2014 at 2:32 pm #

    Another cost you left out — one that is huge and for which numers can be found — are respiratory diseases (asthma, bronchitis, chronic obstructive pulmonary disease, pneumonia, upper respiratory tract infection) as well as cardiac and pulmonary risks caused or exacerbated by vehicle emissions.

    A few resources:
    http://www.cdc.gov/healthyplaces/healthtopics/airpollution.htm

    Something more wideranging on the harmful effects of vehicle emissions:
    http://www.ehhi.org/reports/exhaust/summary.shtml

    And, some medical journal articles:
    http://www.ehjournal.net/content/6/1/23
    http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1240770/

    • Alex Cecchini
      Alex Cecchini January 4, 2014 at 6:15 pm #

      Thanks, Janne! I tried to keep the post a little shorter so I left some of this detail out. I just wanted to highlight the indirect/external costs associated with transportation, and ones I feel are potentially the highest per trip/system for autos (without getting into the highly debatable number attributed to MN drivers). But this is certainly a major cost and definitely calculable, even if (like others) it’s fuzzy and debatable.

      • Janne Flisrand
        Janne January 5, 2014 at 10:21 am #

        Yes, you are certainly taking on a complex issue! (Thanks.) I might quibble with your sense that the health costs of vehicles are lower than the other ones you chose to list. If you consider the emergency room costs, death from pulmonary disease, the amount of work lost from illness, and the lost learning of the low-income kids most at risk from the respiratory diseases, the already huge numbers are astounding. (Heck — with some of those kids, if their parents are at the emergency room with them instead of at work, maybe you could even tie in the costs of homelessesness and incarceration, although I’m not advocating for that)