Assessing Return on Investment in Minnesota’s State Highway Program: Technical Report

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November 2013

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DOT Innovation in Minnesota

This report was created as part of our DOT Innovation work in the state of Minnesota. Read more about the project ››

Assessing Return on Investment in Minnesota’s State Highway Program: Technical Report

The Minnesota Department of Transportation (MnDOT) updated the Minnesota 20-Year State Highway Investment Plan (MnSHIP) in 2012-2013. Through the MnSHIP planning process and based on system performance targets, the plan identified total state highway system needs of $30 billion and projected revenue of $18 billion over the next 20 years resulting in a funding gap of approximately $12 billion. The needs and funding gap primarily reflect mounting pressure from an aging highway system, rising construction costs, and slow revenue growth. Based on analysis in MnSHIP, underinvestment will result in a steady decline in performance of the state highway system.

In 2012, the Minnesota Transportation Finance Advisory Committee (TFAC) was formed to develop recommendations for funding and financing the state highway system over the next 20 years. TFAC recommended meeting the full needs of the state highway system in order for Minnesota to remain economically competitive and provide a high quality of life. Following the completion of TFAC’s work in December 2012, MnDOT partnered with Smart Growth America (SGA) to evaluate and understand the potential return on investment (ROI) of TFAC’s recommendations. SGA works with state departments of transportation across the country to identify transportation policies and programs that enable flexible, efficient ways to increase the capacity to move people, goods, and services on state transportation systems while supporting and expediting job creation and economic development. MnSHIP served as the foundation for both TFAC’s recommendations and this study.

The project team conducted the study over a period of three months, beginning in August 2013. The study process was organized around three technical memoranda and three working meetings with a Project Stakeholder Group. This technical report documents the ROI assessment undertaken in the study.