Tag Archives: transportation

Highway 212 expansion bill introduced and other happenings

Here’s a roundup of some of the happenings around the area:

  • A bill has been introduced in the State Legislature (chief authored in the House by Rep. Ernie Leidiger and in the Senate by Sen. Julianne Ortman) to expand U.S. Highway 212 to four lanes from Jonathan Carver Parkway to County Road 43 in Dahlgren Township.  Also included in the bill is $8 million for construction of an interchange at US-212 and County Road 140 in Southwest Chaska.  This bill would be a critical next step in making sure that US-212 is built out to four lanes to Norwood-Young America.  Additionally, the CR-140 interchange is critical to the success of the Southwest Chaska Master Plan recently ratified by the City Council.  This is a good bill and I hope it will be included in the omnibus transportation package this year.
  • State Representative Joe Hoppe submitted his year-end campaign finance report on February 25, some three-and-one-half weeks late.  Of note in Hoppe’s report is that he collected over $1,700 in “special source” funding in 2012 that he was forced to return.  “Special sources” include lobbyists, political party units, and political action committees.  Additionally, Hoppe’s penchant for filing late in 2012 cost him over $2,600 in late fees with the Campaign Finance and Public Disclosure Board.  Some fiscal responsibility…
  • The City of Chaska City Council meeting tonight has been cancelled.
  • The Chaska Hawks girls basketball team (ranked #7 in Class AAA) will play Richfield (ranked #2 in Class AAA) on Thursday night with a berth in the State Tournament on the line.  The Hawks romped past Benilde-St. Margaret 69-41 on Saturday to reach the section final.  The game will be at 7 p.m. at Minnetonka High School.
  • On the Chaska restaurant front, Dickey’s Barbecue Pit is open in Chaska Commons, while downtown’s Egg & Pie Diner is headed for a mid-March opening.  Construction is also underway at the future location of BullChicks in Chaska Commons.

Our Infrastructure Crisis

Building America’s Future, a bipartisan group dedicated to infrastructure development, recently released a devastating report highlighting our failure to invest in our future by keeping our transportation infrastructure up to date.  I highly encourage you to read the entire document, but I wanted to highlight some of the key takeaways.

1.  Our transportation infrastructure is already overwhelmed, out-of-date, and losing ground to the rest of the world

The explosion of globalization has dramatically impacted our transportation infrastructure.  Our entire system — roads, rail, ports, airports — are working beyond their capacity and are over-congested.  Let’s look at a few examples to illustrate.

Congestion takes $200 billion out of our economy every year — that’s 1.6% of GDP.  Road congestion alone eats up 3.9 billion gallons of gasoline and 4.8 billion hours of lost time.    It’s common for freight trains entering or departing Chicago to spend more time waiting to be loaded/unloaded than in transit, even on trips to or from the West Coast.

Our air traffic control system is reliant on ground-based radar, instead of satellite monitoring.  Fully 37% of late arrivals can be attributed to by inefficiencies created by this system.  The impacts of this are felt most acutely in the New York metropolitan area, where the three airports suffer crippling rates of late arrivals.  For instance, in Newark, nearly one-third of all flights are delayed and the average late arrival is 73 minutes late.  Over half of all delays in New York’s airports can be blamed on the outdated air traffic control system.

When it comes to passenger rail, we are terribly behind other countries.  We have 0 miles of high-speed rail, defined as routes able to maintain an average of at least 155 miles per hour. (The Acela line in the Northeast has a top speed in that range, but only averages about 70 m.p.h.)  China, meanwhile, has 6,649 miles of high-speed rail with plans to nearly double that by the end of the decade.  Even developing countries are growing their systems — Saudi Arabia is constructing its first high-speed rail line, as are Brazil, Morocco, and Qatar.

Spain has nearly 2,400 miles of high-speed rail with plans to expand it to 6,200 miles by 2020.   Before the high-speed rail line between the two cities opened in 2008, Madrid to Barcelona was the most heavily traveled air route in Europe.  Today, a majority of that traffic has shifted to the train, which delivers a comparable travel time end-to-end (including security, baggage claim, etc.)

The port in Shanghai, China handles as much freight as the top seven U.S. ports combined.  Other countries are making investment in their facilities and surpassing us.  For instance, Canada has invested dramatically in its Prince Rupert facility north of Vancouver, linking it directly to a main CN rail line.  Port traffic to this facility has spiked since its expansion in 2007, while California ports have seen slow to no growth due to their congestion.

2.  The demands on our infrastructure are going to grow significantly in the coming years

Globalization isn’t going to stop — it’s only going to increase.  And all projections show that the demands on our infrastructure are going to go along with it.  Port volume at our largest facilities is expected to double by 2020.  Rail freight tonnage is expected to increase 88% by 2035.  And passenger miles drive are expected to increase 80% over the next 30 years.  Commercial air traffic is projected to be up 36% from 2006 levels in 2015.

3.  These issues have real impacts on our families

Most people don’t realize that transportation is the second-largest expense category for families in the United States, behind housing.  The average family spends nearly 18% of their income on transportation — more than food or health care.  Just like health care, though, Americans spend more on transportation than other countries.  Canadians spend 14% of their income on transportation, European Union citizens spend 13% of their income on transportation, and Japanese citizens spend 12.5% of their income on transportation.

The congestion in our transportation system adds costs in other ways, as well.  The lost time (4.8 billion hours a year) is significant.  Anyone who’s traveled for business knows how much productive time is lost at airports, with arrivals 90 minutes in advance of departure, extensive security retrofit into buildings not designed for such activity and often questionable places to plug in and get some work done.

Also, consider the expense that is added to the price of what you buy in your local store when the delivery truck is idling in traffic or the freight train is stuck at the depot in Chicago, or the cargo plane is forced to circle for an hour before landing.

These issues are more acute for low-income families, who spend up to 40% of their income on transportation.  Budget issues at the federal, state, and local levels have inhibited infrastructure construction and limited mass transit options for those in metropolitan areas.  We’ve seen that here in Minnesota, where our roads conditions have declined precipitously (from 8th in the country to 29th since 2002) and transit users have seen escalating bus fares.

What do we do?  The report has some good ideas, and I’ll share those and some of my own in an upcoming post.

Building a better business climate in Minnesota

The new legislative session has started, and even though we’ve got a $6.2 billion deficit to address, there are already calls for tax cuts for business.  It’s seemingly taken as a matter of widespread agreement that Minnesota has an “unfriendly” environment for business.  But is that really the case?  Crunching the numbers indicates that the conventional wisdom on this issue may not in fact be correct.

A recent study by the Council on State Taxation (a collection of 600 large corporations) and the accounting firm Ernst & Young compared states by calculating the ratio of actual tax dollars paid by businesses to states, counties, and cities versus the GSP (Gross State Product) of private sector companies.

This is a different measure used than in most analyses, which merely rank states based on their corporate income tax rate.  Minnesota has a fairly high base corporate income tax rate, and as such doesn’t fare well in these rankings.  As we all know from our personal income taxes, though, the actual tax that we end up paying doesn’t match what bracket we are in because of the various exemptions, deductions, and credits that are in our tax law.  Well, the same things apply to business taxes as well.

When you look at the actual amount of business taxes paid as a ratio the economic activity in the state, Minnesota fares significantly better.  In fact, Minnesota’s ratio of 4.3%, is tied for 16th in the nation, ahead of such purported tax havens as Arizona (4.8%, tied for 26th) or Florida (5.3%, 37th).  Minnesota even fares better than Nevada, South Dakota, and Texas (all at 4.9%, tied for 28th).

Yes, you heard that right.  Minnesota businesses pay less in taxes as a percentage of total economic activity than businesses in Nevada, South Dakota, and Texas.  What’s the Sioux Falls radio guy going to say now?

So the answer to getting Minnesota’s economy back on track isn’t cutting business taxes.  We know that.  All we have to do is look at the experience of the last decade.  Since 2000, we have had five rounds of federal tax cuts and created about 2 million private sector jobs nationwide over that time.  In the 1990s, we increased taxes and created 20 million private sector jobs.  The answer to encouraging economic growth is much larger and diverse than merely cutting taxes.

So what are those answers?  Well, we know what they are.  They are time-tested and proven.  Even with our deficit, we need to protect and promote the societal infrastructure that has given Minnesota such strong economic performance over the last three decades and which has begun to decay over that time.

It’s physical infrastructure (roads and bridges, the electrical grid), it’s education (from early childhood through our colleges and universities) and it’s health care (protecting children and the poor).  As Jeff Rosenberg at mnpublius.com points out, for the cost of the corporate tax cuts, we could make investments that would almost certainly do more to add jobs and create long-term prosperity.

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