What happened: Minnesota transportation taxes will bring in $184 million – 3.5 percent – less than expected this year, the Minnesota Department of Transportation (MnDOT) budget director told state lawmakers Jan. 17. The 2024-2025 fiscal year doesn’t look much better, with anticipated revenue falling $210 million – 3.8 percent – below projections.
Why it matters: Revenue from fuel taxes, motor vehicle excise taxes, and registration fees is growing – just less than anticipated. MnDOT blames pandemic-related supply chain disruptions; decreased car sales, increased fuel efficiency, telework, and higher gas prices.
What’s next: While MnDOT projects an annual shortfall of about $1 billion for the next 20 years, and an additional $1 billion for the local road system, the rest of the state is facing a $17 billion surplus. Tapping these funds is one short-term solution available to lawmakers while they search for a long-term answer to the funding gap. The legislature is expected to consider a two-year transportation budget and capital investment bill this session.