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Legislature > House of Representatives > House Research > Taxes > Major State Aids & Taxes

Major State Aids & Taxes: Highway Aid

Program Description

Highway aid is the total amount of state aid distributed to counties, cities, and towns for highway purposes. It includes four basic types of aid: (1) amounts distributed according to constitutional formula to all counties and eligible cities; (2) amounts distributed to counties, cities, and towns from state bond proceeds; (3) amounts distributed to towns for town roads and bridges; and (4) amounts distributed to counties from sales tax on motor vehicle leases. The sources of these funds are the Highway User Tax Distribution Fund (from a portion of the motor fuels tax, motor vehicle registration tax, and motor vehicle sales tax revenues), the sales tax on motor vehicle leases, and proceeds from state bonds.

The Minnesota Constitution sets the distribution formula for 95 percent of the money in the Highway User Tax Distribution fund: 29 percent is allocated to the County State-Aid Highway Fund, 9 percent to the Municipal State-Aid Street Fund for cities with populatios over 5,000, and 62 percent to the state Trunk Highway Fund. Allocation of the remaining 5 percent of the fund is determined by the legislature. In 2013, following a statutory formula, a little under half of the set-aside was used for town roads and town bridges. The rest went into a flexible highway account that was used for road improvements on "turnbacks" in which trunk highways become part of local road systems.

County and municipal turnback account money (excluding the money in the town road and town bridge accounts shown in the table) is not included in the state totals. This money is used to repair former state highways that have been or are being "turned back" to counties and municipalities. In 2013, the state allocated approximately $48.2 million to the county turnback account, and there was no allocation to the municipal turnback account. Disbursements from the turnback accounts of $33.9 million to counties and $3.5 million to municipalities were used for maintenance. The amount spent on turnbacks in each county is not readily available.


Aid Amount and Reporting

2013 Highway Aid: $721.3 million

The total state highway aid paid in calendar year 2013 to the counties, cities (i.e., municipal), and towns is shown below by category. Bridge bond funding amounts are the total expenditures during 2013 (using the proceeds from state bonds that had been authorized in 2013 or previous years).

In fiscal year 2013, the total highway spending from state and federal resources amounted to nearly $1.9 billion for both state and local road systems. This total includes the $721.3 million in state aid in this report except for the $37.2 million in bond funding.

Type of Highway Aid Amount Total
County Aid County State Aid $483,075,941
County Bridge Bond Funding 26,701,118
Motor Vehicle Lease Sales Tax Aid 14,989,319
County $524,766,378
Municipal Aid Municipal State Aid $149,370,509
Municipal Bridge Bond Funding 9,523,404
Municipal $158,893,913
Township Aid Town Road Account $27,504,264
  Town Bridge Account* 10,099,926  
Town Bridge Bond Funding 0
Township $37,604,190
Total Highway Aid $721,264,481
* The Department of Transportation sets aside a portion of Town Bridge Account funding for flexible distribution as needed throughout the state. Amounts in this special Town Bridge Account are not always spent within the calendar year and are not included here.

Highway aid data was obtained from the Department of Transportation.

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Recent Law Changes

The 2008 Legislature made two basic changes (effective July 1, 2009) to the allocation of flexible highway account funds, to reallocate a portion of the funds to metropolitan area counties and modify allowable uses of the funds.

The 2008 Legislature also provided for 50 percent of motor vehicle lease sales tax revenues in excess of a base amount to be transferred to the county state aid highway fund, for allocation to metro area counties other than Hennepin and Ramsey. (The remaining 50 percent over the base amount is transferred to the Greater Minnesota transit account.) The first year a transfer occurred under this provision was in 2012.

Also in 2008, the legislature modified the mechanism for distributing aid to counties by establishing a second formula to allocate a portion of County State-Aid Highway Fund revenues.

The legislature has regularly authorized bonding for local roads and bridges. Authorizations totaled $10 million in 2009, $66 million in 2010 (with an additional $10 million for disaster relief), $43 million in 2011, and $40 million in 2012. There were no new authorizations in 2013. This report shows local road and bridge bonding amounts in the year the bonds were expended, which may lag behind when they were authorized. (The lag is largely because bonds are sold based on the cash flow needs of funded projects rathar than all at once.)

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Per Capita Maps

Map of highway aid per capita by countyMap of highway aid per capita by economic development region

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The Past Five Years of Highway Aid

The table below shows the distribution of highway aid in thousands of dollars for the past five years for the state and economic development regions. The graph shows total dollars of highway aid for that same time period in nominal (actual) and constant (inflation-adjusted) dollars.

Highway Aid: Calendar Years 2009 to 2013
Nominal dollars, in thousands
2009 2010 2011 2012 2013 5-Yr. Chg. Aid
State $579,749 $590,755 $652,552 $690,154 $721,264 24%

Northern Regions
Northwest (1)
Headwaters (2)
Arrowhead (3)
West Central (4)
Five (5)
East Central (7E)
30,317
17,924
54,689
40,357
23,030
21,303
31,059
17,868
57,441
43,415
24,254
23,033
34,023
19,102
64,766
48,113
25,802
24,806
35,922
20,234
66,268
50,568
27,011
26,658
35,824
20,321
70,297
49,968
27,669
28,005
18
14
35
30
35
31

Southern Regions
Six East (6E)
Upper MN Valley (6W)
Central MN (7W)
Southwest (8)
Nine (9)
Southeastern MN (10)
18,772
14,984
30,919
33,591
40,879
61,858
20,069
16,513
33,777
35,678
40,690
64,946
20,861
16,843
37,764
36,770
45,682
73,465
22,874
17,931
40,579
39,167
47,519
78,202
23,233
17,999
40,866
41,081
48,887
80,014
99
24
42
29
19
40
Total Nonmetro $388,623 $408,744 $447,998 $472,934 $484,163 34%

Metro Region
Hennepin County
Ramsey County
Remaining Metro
84,800
30,036
76,290
68,877
32,868
80,265
83,803
33,034
87,717
76,520
35,369
105,332
87,726
35,987
113,389
-24
-6
42
Total Metro $191,126 $182,010 $204,555 $217,220 $237,102 5%

Statewide Highway Aid

Line graph of statewide highway aid for five years

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March 2017

House Research Department  ♦  600 State Office Building, Saint Paul, MN  55155  ♦  House.Research@house.mn  ♦  651-296-6753