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Summary
of meeting with
Matt Kane
Civic Caucus,
8301 Creekside Circle,
Bloomington, MN 55437
Friday, June 20th,
2008
Guest
speaker:
Matt Kane,
policy
fellow for infrastructure and economic development, Growth and Justice
Present:
Verne
Johnson, chair;
Chuck Clay, Paul Gilje, and Jim Olson (by phone)
A.
Context of the meeting:
This meeting is another in a series of meetings on the question of
continuing major transportation issues in Minnesota.
B.
Welcome and introduction:
Verne and
Paul welcomed and introduced
Matt Kane,
policy
fellow for infrastructure and economic development, Growth and Justice.
Growth and Justice is a non-profit policy research organization that looks
at cost-effective, public-sector investments by state government that will
lead to economic growth for Minnesota and expanded economic prosperity for
the state’s people and places.
Kane has worked on
public policy issues for more than 20 years, primarily at the national
level. Prior to joining Growth and Justice in 2007, Matt worked for the
Washington-based Northeast-Midwest Institute, the National League of
Cities, and a national association of economic development centers. He
also taught economic development classes at the University of Michigan.
Matt has testified before Congress about local economic development and
worker dislocation. He holds a bachelor’s degree from the
University
of St. Thomas
and a master’s degree from the University of Minnesota through the
Humphrey Institute of Public Affairs.
C.
Comments and discussion--During
Kane's comments and in discussion with the Civic Caucus the following
points were raised:
1. Metro structure a practical accommodation to
reality--Commenting on divided transit authority between the
Metropolitan Council and county governments in the metro area, Kane said
the arrangement is a practical accommodation to reality. A new
quarter-cent sales tax for transit is, by law, being imposed by county
governments, not the Metropolitan Council. It is somewhat unrealistic to
put the county commissioners on the hook for raising the funds and expect
them to hand off decision-making authority to another government entity.
Thus, the counties are empowered to decide how the new tax money will be
distributed, consistent with the Metropolitan Council's policy plan. In
the best of all worlds, you'd probably place more authority in the
Council, but we have to be practical, he said. Moreover, many
legislators consider the Council to be too closely tied to the Governor,
because all Council members are appointed by the Governor to terms that
are co-terminus with the Governor.
Growth &
Justice is not a fan of the sales tax, Kane said, because it hits lower
income persons disproportionately.
2. Whether transportation funds are distributed
as entitlements, rather than according to needs--It was noted
that several weeks ago, Ken Orski, a national transportation consultant,
was critical of the way transportation funds are distributed in
Minnesota. Orski's concern was that the funds are largely distributed to
different levels of government according to statutory or constitutional
formulas that bear little relationship to need. In effect, Orski said,
the funds are "entitlements" for various levels of government.
Kane noted
that the 2008 Legislature changed a formula for distribution of funds
among counties to give greater account to transportation needs, not just
an automatic distribution among counties, irrespective of needs. He also
said that the Legislature has an interest in assuring that all parts of
the state are treated equitably in distribution of revenue.
3. Need for authority at the metro level as
well as the state level--A Civic Caucus member inquired whether
more leadership and planning responsibility ought to exist at the state
level, because of the critical role that transportation plays in the
overall economy of the state.
Kane
agreed that a statewide transportation system allows the safe and easy
movement of people and goods. It makes places accessible to people. And
it lays the base for business activity that fosters economic prosperity.
Commerce needs roads, and businesses incur costs from congestion delays
and poor road conditions. Wise investments in transportation
infrastructure help put
Minnesota’s
households in a better position to benefit from economic growth. And a
high-quality transportation system makes for faster commutes, reduced
delays, fewer accidents, less fuel consumption and better air quality.
He noted,
however, that it is useful to place some authority at the metro level,
instead of with the state, because experience nationally has shown that
metro-level decision makers are more likely to explore a variety of
options for dealing with the much more complex transportation problem in
the metro area, and more likely, too, to consider transit as a viable
option. Because of the much larger number of trips and the accompanying
congestion in the metro, investments in transit are important.
4. Congestion is a reflection of a strong
economy--Having a vibrant economy such as in the Twin Cities
area inevitably produces congestion, Kane said. We'd not want to reduce
economic activity as a way to ease congestion. Getting rid of congestion
isn't the goal, he said. The goal is providing access to destinations for
people.
The
upcoming Central Corridor LRT line connecting the downtowns of Minneapolis
and St. Paul isn't so much designed to ease congestion as it is to assure
access for people, he said. Projections indicate that buses won't be able
to accommodate all demand in the corridor in future years, he said. As
part of a more complete transit system and an expanded LRT network, the
line will allow more people to move in less congestion.
Light rail
is but one element of that comprehensive system, he said. The flexibility
of buses and their lower upfront costs make them a critical part of the
plan. We need to keep in mind both costs and who is served when exploring
transit modes.
He noted
that major rapid bus service will shortly be added to I-35 and to Cedar
Avenue south from Minneapolis well into Dakota County.
5. Serving downtown versus suburban
destinations--A
Civic Caucus member noted that much more attention is given to transit
service for the downtowns, where not more than 15 percent of the region's
jobs are located, rather than to suburban destinations. Kane replied that
mass transit requires a high density of jobs at the destination end in
order to be fiscally viable. The downtowns have vastly higher densities
of jobs than does any suburban destination. A member commented that
perhaps more innovative approaches--than a corridor approach-- are needed
in designing suburban transit service. Kane responded that it is
difficult to design a system to well serve potential transit users in
locations with low densities for housing and low concentrations of jobs,
but innovative approaches would be welcome.
6. Comparative expense between buses and rail--LRT
has larger up-front capital expense, but lower operating expense than
buses, Kane said. LRT has fewer drivers, fewer vehicles, and uses
electricity, not petroleum, for fuel. In terms of dollar amounts,
although not percentages, express buses that operate non-stop from suburbs
to the downtowns require a more subsidy than local buses that pick up and
discharge passengers every block, he said.
Kane
acknowledged that tensions will exist between the Metropolitan Council and
the metro counties over use of the new county-based transit tax. The
counties are not as anxious to use those funds for operating subsidies as
is the Metropolitan Council.
7. What about reducing congestion?--A
Civic Caucus members said that large numbers of people in the metro area
remain deeply concerned over sitting in traffic. Kane acknowledged that
congestion is an important issue, politically and in terms of quality of
life. He said that the metro area needs a wider range of options for
getting to where they need to go and that land use matters, too, in terms
of where people live vis-a-vis where they work. Kane said that the use of
pricing mechanisms to encourage drivers to seek lower cost alternatives
has appeal. He noted that the forthcoming changes to the 35W corridor
under the federal-state-local Urban Partnership Agreement will provide
valuable insights into a variety of transportation options, including
congestion pricing, traffic management strategies, and transit structured
to offer riders clear advantages over driving.
It will
become more important in coming years, he said, to move to a different
approach--other than the gasoline tax and vehicle license fees-- to paying
for the cost of roads. Growth & Justice favors tapping into income tax
revenues. Another approach, he said, would be to charge motorists based
on vehicles miles traveled, perhaps varying the rate based on when, where,
and how far a trip occurs. In response to a question, Kane said he is not
opposed to considering a parking tax, too.
8. Making rail and highway decisions in the
same jurisdiction?--Asked
whether rail and highway decision-making will occur in the same
governmental body, Kane replied that decisions need to be very well
coordinated, but one has to recognize the practical difficulties, in light
of legislative action.
9. More and different transportation funding is
needed--Kane characterized the work of the 2008 Legislature as
a down payment on catching up on a transportation backlog. To the extent
that gas taxes fade in the future as an effective source of transportation
revenues, we likely will need to look at variety of sources to produce the
adequate income stream, he said. Growth & Justice believes that to secure
additional public funds for investments in transportation and education,
Minnesota
should look to income tax increases targeted toward higher income
earners. Kane cited the Minnesota Department of Revenue’s 2007
Minnesota Tax Incidence Study (http://www.taxes.state.mn.us/legal_policy/other_supporting_content/07_incidence_report_links.pdf)
which shows that for combined state and local taxes, state residents
earning the most pay a smaller share of their income in taxes than those
in the middle-income range. Specifically, earners in the top income
category pay 10.9 percent of their income in state and local taxes, while
those in the fourth through ninth categories pay 11.5 to 12.3 percent.
Kane said that state and local taxes as a percentage of total income in
Minnesota have declined since the 1990s.
10. How policy recommendations at Growth &
Justice are made--Growth & Justice, according to its mission
statement, is a progressive economic think tank committed to making
Minnesota’s economy simultaneously more prosperous, fair and
environmentally sustainable. The Growth & Justice website describes its
policy development process as follows:
a. Starting with the
facts.
First, with the input
of expert advisors, we design a project that will take a fresh, fact-based
look at an important strategic issue facing the Minnesota economy. The
subject matter experts may do original research or suggest current
research that bears on the issue.
b. Reframing the
issue. A steering committee of community members provides
context on how the issue affects a broad range of citizens, businesses and
institutions. Together with Growth & Justice staff, they review the
research, discuss its implications and propose approaches to the issue.
c. Testing ideas.
Next, we invite a broad cross-section of citizens and thought leaders
to public round tables where they comment on the issue and react to our
ideas. As part of this process, we aim to shake up traditional thinking
and mold competing world views into a broader consensus. This citizen
input is brought back to the steering committee, where it is incorporated.
d. Initiating
statewide discussion. Through a formal report, legislative
testimony, public forums, published opinions and other forms of outreach,
Growth & Justice helps build broad support for policies that grow the
economy and spread prosperity to more Minnesotans.
11. Thanks--On behalf of the Civic
Caucus, Verne thanked Kane for visiting with us today.
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