Text: May 30, 2017The Honorable Kurt DaudtSpeaker of the HouseRoom 469, State Office BuildingSt. Paul, Minnesota 55155Dear Speaker Daudt:On the advice of my General Counsel, to ensure there are no legal challenges, I am signingChapter 3, House File 3 rather than allowing it to become law without my signature.As I have previously stated, our transportation and transit systems lack the resourcesnecessary to maintain our existing system, let alone fund the needed expansion to support a thrivingeconomy. My concerns with this bill are consistent with the concerns I laid out in my veto letter forChapter 62, House File 861. This is not a comprehensive transportation bill, it lacks constitutionallydedicated as well as stable funding and has inadequate funding for transit. As I have repeatedly statedin addition to current revenue, Minnesota needs the following funds to adequately fund roads,bridges, and transit:An additional $400 million per year in ongoing, dedicated funding just to maintain ourstate's highways, roads, and bridges in their current conditions;• Another $200 million per year in ongoing, dedicated funding in order to make the criticalimprovements and expansions on our state highways, interstates, and bridges, which willbe crucial to our continuing economic and social vitality; andAn additional $300 million per year in ongoing, dedicated funding in order to maintainour current transit and bus systems, and to invest in transit expansions across the statenecessary to reduce highway congestion and accommodate population growth.This budget invests only $300 million above base in funding for roads, bridges, and transit infiscal year 2018-2019 in comparison to my proposal, which would have raised $944 million in newand constitutionally dedicated funding for roads and bridges, $180 million in new and dedicatedfunding for transit, and $114 million in new and dedicated funding for local roads, bridges, and transitin fiscal year 2018-2019. The new funding invested in roads, bridges, and transit is far below theneed.Below is a side-by-side comparison of funding received by the Highway User TaxDistribution system under this budget vs. what my proposal would have raised [see attached photo].I also am disappointed that the legislature did not consider my proposal to create on-goingdedicated funding for local roads, bridges and transit. I recommended $114 million in additional anddedicated funding to small cities ($38 million), large cities ($38 million), Greater Minnesota transit($20 million), ADA assistance to cities ($8 million), safe routes to school ($5 million), and tribalroads ($5 million). The vast majority of Minnesota's roads and bridges are maintained by township,city, and county governments, whose main source of funding are property taxes. My proposal wasintended to lessen the burden on property taxes. I do support the modest investments provided tolocal governments. However, the one-time funding does not suppot1 this on-going need localofficials face.• $25 million for local bridges (on-going)• $16 million for small cities under 5,000;• $10 million for metro roads• $4 million for township roadsFurthermore, I am concerned that this bill issues $940 million in borrowing (trunk highwaybonds) without new constitutionally dedicated revenue to pay off the bonds. In future years, shouldthe legislature reverse or reduce the general fund commitment to roads and bridges, MnDOT wouldbe forced to pay for debt service from sources that are meant for road and bridge construction.The bill also falls short of funding the needed investments in metro area transit. This billfunds Metro Transit at $70 million in fiscal year 2018-2019 to ensure that there will not be areduction of vital bus services in the next biennium. However, the funding increase is one-time only.Therefore, Metro Transit is projected to have a $110 million structural deficit in the next biennium.As a result, Metro Transit will begin planning for reduced service despite the projected populationincrease of 750,000 people by 2040. I urge the legislature to work with the Metropolitan Council toadequately fund metro transit next year so that our transit system remains strong and our region iscompetitive. I am pleased that this bill removed the policy provisions included in the vetoed bill thatobstructed transit development.This bill fully funds the MnDOT freight rail office and maintains base funding for thepassenger rail office. The freight rail office is responsible for administering key rail safety programsstatewide, including identifying and upgrading high-risk grade crossings. Next year, I encourage thelegislature to consider my proposals for additional rail inspectors, the rail grade crossing safetyprogram, and extending rail service to St. Cloud. These are key investments to ensure safety as wellas support an important economic engine of our state.This bill fully funds my request for the State Patrol's helicopter at approximately $5.8million. This investment will allow the State Patrol to provide critical life-safety search and rescue,which no one else can provide in Minnesota. This bill also provides one-time $16 million to fundMNLARS, the backbone of our driver and vehicle services system. Next year, I encourage thelegislature to re-consider my proposal to establish a stable ongoing funding source for this criticaldriver and vehicle services system. The bill also provides funding for the MN Crash system which lawenforcement and other stakeholders rely on to better direct resources related to safe roads. The billalso increases the salary for State Patrol Academy trainees to encourage and support recruitment.This bill makes the necessary investments in our regional airports to permit us to leveragefederal dollars and improve infrastructure to support local economic growth.• An additional $6.6 million will make the necessary improvements at the DuluthInternational Airport and the Sky Harbor Airport to leverage an additional $47 million infederal funding.• An additional $2.3 million investment in terminal improvements at the RochesterInternational Airpott will help the airpo1t accommodate the rapid economic growthdriven by Destination Medical Center and Mayo Clinic.Minnesota needs long-term, sustainable, and constitutionally dedicated funding forour roads, bridges, and transit. While I am concerned that the use of the General Fund in thisbill is not reliable, I acknowledge that this bill does provide a much-needed funding infusion,in fiscal years 2018-2019 to maintain our infrastructure so that we can continue to makeprogress even though it remains short of addressing the growing gap between resources andtransportation system needs.Sincerely, Mark DaytonGovernorcc: Senator Michelle L. Fischbach, President of the SenateSenator Paul E. Gazelka, Senate Majority LeaderSenator Thomas M. Bakk, Senate Minority LeaderSenator Scott J. Newman, Minnesota SenateRepresentative Melissa Hottman, House Minority LeaderRepresentative Paul Torkelson, House of RepresentativesThe Honorable Steve Simon, Secreta1y of StateMr. Cal R. Ludeman, Secretary of the SenateMr. Patrick Murphy, Chief Clerk of the House of RepresentativesMr. Paul Marinac, Revisor of Statutes