here for PDF format
Participant Responses to this
of meeting with State Rep. Bernie Lieder
Civic Caucus, 8301
Creekside Circle, Bloomington, MN
speaker: State Rep. Bernie Lieder,
chair House Transportation Finance Division and chief author of major
transportation bill that passed the Legislature on Feb.21.
Johnson, chair; Chuck Clay, Paul Gilje, Jim Hetland (by phone), John Mooty
(by phone), and Clarence Shallbetter (by phone)
Context of the meeting--The
Civic Caucus has been devoting considerable attention to issues of
leadership by the Governor and Legislature. Also the Civic Caucus issued
a major report in 2003 calling for changes in transportation
policy-making. Today we're visiting about changes in transportation
policy-making that are contained in a transportation funding bill approved
by the Legislature on Feb. 21.
Welcome and introductions--Verne
and Paul welcomed and introduced State Rep. Bernie Lieder, Crookston, MN,
who is serving his 12th term in the House. Lieder, a retired engineer, is
a graduate of the University of Illinois and of Purdue University. He is
chair of the House Transportation Finance Division and is chief author of
H.F. 2800, a major transportation funding bill that passed the House and
Senate last Thursday.
Policy planning aspects of the transportation bill--An
additional $600 million per year for highways and transit is provided by
the bill. The bill increases the state gasoline tax by five cents a
gallon and imposes an additional gas tax surcharge of up to three and a
half cents a gallon to pay off road construction debt. Motor vehicle
license fees are increased. A one-fourth cent sales tax increase in the
metro area, dedicated to transit also is included.
Department of Transportation, the state's counties and cities over 5,000
population will share proceeds of the gasoline tax and motor vehicle
license fees, 62 percent state; 29 percent, county, and 9 percent, cities,
as provided in the constitution.
The metro sales tax
would be imposed by county boards in the metro area who would organize a
joint powers board. The board would consist of "one or more"
commissioners of each county in the metro area and the chair of the
Metropolitan Council. The joint powers board would decide which transit
projects in the metro area would receive funding.
The Governor vetoed the bill, and the Legislature will soon take up the
question of overriding the veto, possibly today.
Comments and discussion with Rep. Lieder--During
Lieder's comments and in discussion with the Civic Caucus the following
points were raised:
1. Overall impact of transportation bill--It's
very difficult to pass a great bill, with all the compromises required,
but this bill is better than most, Lieder believes. It's more of a
pay-as-you-go approach rather than putting everything into bonding, as had
been proposed by Gov. Pawlenty. It provides metro sales tax for metro
transit. The Minnesota Department of Transportation will receive amounts
equal to about 50 percent of its current construction budget. For cities
and counties the amounts will be about 25 percent. The Governor vetoed
the bill but Lieder believes the Legislature will over-ride the Governor's
veto, possibly today. (Editor's note: the veto was overridden. Thus the
bill has become law.)
2. Difficulty in balancing so many interests--Lieder
said the Legislature has a difficult time balancing all the interests,
metro versus out-state, transit versus highways, and a new divide, west
metro versus east metro.
3. Further fragmentation of transportation policy--The
addition of a joint powers board for transit in the metro area seems to
exacerbate an already-fragmented transportation policy-making structure in
the state, a Civic Caucus member commented. Nothing is done in the way of
trying to assemble a comprehensive transportation plan on behalf of the
existing jurisdictions--including metro and out-state transit, state
highways, counties, and cities, the member said. In addition, an unusual
county-led joint powers board is superimposed on the same area covered by
the Metro Council.
It is the approach that the counties requested, Lieder said. Counties have
concerns about power and influence of the Metropolitan Council, including
how its members are selected (by appointment by the Governor). The
counties were also active in advocating the creation of a joint powers
board made up of the counties to allocate the sales tax revenues rather
than turning the responsibility over to the Metro Council. There continues
to be significant resistance to giving the Metro Council responsibility
for determining what to fund for transit and to deciding where transit
improvement are to be made.
4. Metro area
transit extending beyond seven-county borders--Earlier versions
of the bill attempted to address concerns within the seven-county metro
area, such as that park-and-ride commuter lots were filling up with
residents of outlying counties that weren't sharing the expenses of such
lots. Therefore, in the earlier versions a way was provided for outlying
counties to contribute financially. But such provisions were deleted in
the final version because of opposition from outlying counties.
It was noted that the Civic Caucus in its 2003 report on transportation
(see www.civiccaucus.org. Under "Position Reports", click on
"Transportation 2003) called for major structural change in transportation
that would have unified transportation planning and provided a way for all
affected geographic areas to be included.
5. Absence of
the role of the Governor--A Civic Caucus member observed that
the bill virtually ignores the role of the Governor, so it is difficult to
see how a statewide perspective can be brought to bear on transportation.
Lieder replied that over the last six years legislators have repeatedly
looked to the Minnesota Department of Transportation (MnDOT) to be an
advocate for more funds, but that MnDOT has not responded. Thus the
Legislature had to fill that void.
6. Covering operating subsidies for transit--A
Civic Caucus member commented that operating expenses for transit usually
exceed fare box revenues 3-to-1. Lieder was asked how much of the 1/4 cent
increase in the sales tax will be used to cover operating subsidies. Such
subsidies have been provided by the general fund in the past but will be
covered, after July 1, 2009, by the metro sales tax. Lieder said. Subsides
from Hennepin County for operating subsidies for the Hiawatha light rail
line also will be covered by the sales tax, he said.
Lieder affirmed that the first call for sales tax revenue would likely be
for transit operating subsidies. When asked if the legislature would
likely appropriate some general revenue if these funds were not
sufficient, Lieder said the counties had better figure this out and use
the property tax if necessary rather than come to the state.
7. Placing funds where they'll do the best job of
fighting congestion--It was noted that serious questions have
been raised about the fact that the proposed Central Corridor light rail
line (on University Avenue between Minneapolis and St. Paul) might have
the effect of increasing congestion. Lieder was asked how such a project
could receive a high priority ranking in light of other urgent needs,
including bridge construction. Lieder replied that much of the impetus for
the Central Corridor light rail line comes from the availability of
federal funds, which Minnesota would lose out on without making
applications such as for the Central Corridor. The federal government
seems to be getting more into the transit mode because the federal highway
user fund is in serious financial difficulty.
8. Likely impact of a broader definition of
transit--Lieder said that the metro sales tax for transit would
be available for all sorts of ways for people to ride--from ride-sharing,
to buses, to rail. It was noted, however, that the chief orientation of
metro counties, with their county rail authorities, has been on use of
transit funds for rail, not other forms of transit.
9. Absence of a state planning agency--Lieder was asked about
the potential of some body at the state level being able to put together a
comprehensive transportation plan for all types of major transportation
facilities by all jurisdictions. Nothing is probably more important to the
economic health of the state than education and transportation, a Civic
Caucus member said. Lieder agreed that comprehensive planning is needed.
He noted that MnDOT does present long-range plans for part of the state's
transportation system: state trunk highways. But MnDOT doesn't have
authority for other components, such as transit or major county and city
In response to a question Lieder said he doesn't know how the various
jurisdictions would respond to proposals for an overall transportation
plan. Having just put together the transportation funding bill, and the
bargaining necessary to gain enough votes for passage and to have a good
chance at over-riding a veto, Lieder doesn't know what would be necessary
to gain agreement on a structure for transportation planning. Lieder said
Rep. Alice Hausman is concerned about transportation planning structure.
Lieder said a comprehensive transportation plan is absolutely what the
10. Whether funds should be earmarked for
specific projects--Lieder said he always has opposed the
practice of legislators' agreeing to support a bill in exchange for their
favorite projects being included. In the current bill some provisions come
dangerously close to earmarking. The criteria for certain bridge
reconstruction, for example, are drafted so they can only apply to the
Lafayette bridge and the Hastings bridge. The impetus for earmarking is
usually the result of under-funding, he said. Certain interests have been
talking to him about finding funds for a $100 million freeway interchange.
There's just not enough money. If transportation revenues become adequate,
and stable, then pressures for earmarking will be reduced.
Although the bill does not specifically designate routes or projects for
highway improvements, it does designate projects for transit, especially
LRT and commuter rail projects. While the legislature does not earmark
funds generally for roads it does routinely designate other kinds of
projects in the general funded state bonding bill.
Prohibition on toll roads explained--It was noted that the
legislation prohibits toll roads. Lieder said the prohibition applies to
existing freeway lanes that aren't toll lanes now. It doesn't apply to any
toll road or high-occupancy lane established before September 1, 2007, or
to additional lanes for more capacity that might be built in the future.
Lieder says he personally favors toll roads, but many legislators are
strongly opposed. He would favor a new Stillwater bridge as a toll road.
12. Desirability of using a source of general revenue--Questions
were raised about the desirability of using a sales tax--which is commonly
used as a source of general revenue in the state--for transportation,
particularly because transportation has many other potential revenue
sources available, unlike services like education.
13. Exploring "value capture" revenue
potential--Continuing the discussion of such improvements as
major freeway interchanges, it was noted that such installations have the
effect of producing substantial increases in the value of nearby land.
Lieder said the bill appropriates $325,000 for a study by the Center for
Transportation Studies at the University of Minnesota on capturing the
value of benefits created by major transportation improvements to help
finance such improvements.
14. Consequences if the Governor's veto is
sustained--A member inquired why, as published reports have
indicated, the Legislature would be unlikely to try to pass another
transportation bill this session. A lesser bill, Lieder said, would be
opposed because it would simply prolong the agony of under funding.
Minority Republicans have a bill for using $225 million of general revenue
to reply some transportation bonds. That money could simply come from
other services like health care and education, he said.
behalf of the Civic Caucus, Verne thanked Lieder for meeting with us this
morning, particularly with all the activities associated with trying to
override the Governor's veto.
Participant Responses to Bernie
Lieder Interview, and to Civic Caucus Transportation Questions
The Civic Caucus
is a non-partisan,
tax-exempt educational organization. Core participants
include persons of varying political persuasions, reflecting
years of leadership in politics and business.
A working group meets face-to-face to
provide leadership. They are Verne C. Johnson, chair; Lee
Canning, Charles Clay, Bill Frenzel,
Paul Gilje, Jim Hetland,
John Mooty, Jim Olson, Wayne Popham and John Rollwagen.
Click Here to
see a biographical statement of each.