Research Reports

Local Contributions to State and Regional Transportation Facilities in Minnesota

Principal Investigator:

Jerry Zhao, Camila Fonseca, Raihana Zeerak, Nathan Bean

May 2020

Report no. MnDOT 2020-12

Projects: Evaluating the Impact of Local Expenditures on State and Regional Transportation Facilities

Topics: Economic competitiveness, Economics, Funding & finance, Planning, Rural Transportation, Urban Transportation

Highway construction, maintenance, and improvements are supported by federal, state, and local funding. States use a combination of state funding and federal dollars to invest in highways and to provide aid to local governments. In recent years, federal and state governments have had challenges keeping up with transportation needs. These challenges affect funding for roadways, including the share of funding going to local governments. However, there is limited research on the impact of changes in federal and state funding on local spending, particularly the share of local government spending on state and regional highway infrastructure. This research aims to fill that gap by assessing the contributions of local expenditures to state and regional transportation facilities in Minnesota. Our findings show that while cooperative agreements can be mutually beneficial for both local and state governments, they can also carry the risk of unexpected costs for local governments. Therefore, local governments should be aware of the risks of entering into cooperative agreements, particularly when state funding totals are capped. Effective communication during planning and construction can mitigate some of the risk of cost increases as well as uncertainties around cost coverage by MnDOT. The use of state contingency funds to reimburse local governments for unexpected trunk highway expenses could also provide additional financial security for local governments.

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