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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 populations 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 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 2014, the state allocated approximately $50.0 million to the county turnback account, and there was no allocation to the municipal turnback account. Disbursements from the turnback accounts of $56.9 million to counties and $13.6 million to municipalities were used for maintenance. The amount spent on turnbacks in each county is not readily available.


Aid Amount and Reporting

2014 Highway Aid: $721.1 million

The total $721.1 million in state highway aid paid in calendar year 2014 to the counties, cities (i.e., municipal), and towns is shown below by category in the following table. Road and bridge bond funding amounts are the total expenditures during 2014 (using the proceeds from state bonds that had been authorized in 2014 or previous years).

In fiscal year 2014, the total highway spending from state and federal resources amounted to nearly $2.6 billion for both state and local road systems. This total includes the $721.1 million in state aid in this report except for the $15.1 million in bond funding.

Type of Highway Aid Amount Total
County Aid County State Aid $500,447,882
County Bridge Bond Funding
Motor Vehicle Lease Sales Tax Aid 11,973,180
County $524,850,346
Municipal Aid Municipal State Aid $154,615,011
Municipal Bridge Bond Funding 2,656,801
Municipal $157,271,812
Township Aid Town Road Account $28,519,262
  Town Bridge Account* 10,472,647  
Town Bridge Bond Funding 0
Township $38,991,909
Total Highway Aid $721,114,067
* 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 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. A temporary cap on the amount going to counties was set for fiscal year 2014.

The legislature has regularly authorized bonding for local roads and bridges. Authorizations totaled $66 million in 2010 (with an additional $10 million for disaster relief), $43 million in 2011, $40 million in 2012, and $36.6 million in 2014. There were no 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 and constant (inflation-adjusted) dollars.

Highway Aid: Calendar Years 2010 to 2014
Nominal dollars, in thousands
2010 2011 2012 2013 2014 5-Yr. Chg. Aid
State $590,755 $652,552 $690,154 $721,264 $721,114 22%

Northern Regions
Northwest (1)
Headwaters (2)
Arrowhead (3)
West Central (4)
Five (5)
East Central (7E)
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
36,584
20,572
68,858
50,302
29,247
27,090
18
15
20
16
21
18

Southern Regions
Six East (6E)
Upper MN Valley (6W)
Central MN (7W)
Southwest (8)
Nine (9)
Southeastern MN (10)
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
23,921
18,033
41,507
40,459
48,676
80,331
19
9
23
13
20
24
Total Nonmetro $408,744 $447,998 $472,934 $484,163 $485,582 19%

Metro Region
Hennepin County
Ramsey County
Remaining Metro
68,877
32,868
80,265
83,803
33,034
87,717
76,520
35,369
105,332
87,726
35,987
113,389
83,392
38,468
113,672
21
17
42
Total Metro $182,010 $204,555 $217,220 $237,102 $235,532 29%

Statewide Highway Aid

Line graph of statewide highway aid for five years

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December 2017

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