Why the bridge collapsed

I can't turn on the mainstream media sensationalism machine yet to find out what is going on with the bridge in Minnisota, although it sounds absolutely terrible, and my heart goes out to the victims.

And no - oddly, it wasn't terrorism. It seems there is a much more mundane reason for such a cataclysmic disaster than that 'someone attacked us.' The GOP Governor didn't want to raise state taxes to pay for road and bridge repairs.

The bridge was under repair at the time of it's collapse, but much needed improvements to roadways and yes bridges have been behind schedule for years, as a transportation bill drafted to fix them was vetoed by GOP governor Tim Pawlenty:

It's not every day you see business interests lobbying hard for a tax increase. But in the marbled corridors of the State Capitol, it hasn't been unusual during the past two legislative sessions to see paid suits from the Itasca Project--a lobbying consortium representing 30 of the state's largest employers--and the Minnesota Chamber of Commerce buttonholing lawmakers and imploring them to start spending money to address the deplorable condition of Minnesota's roads.

Last May the legislators finally listened, as both the Republican-controlled House and the DFL-majority Senate passed a bill raising the gas tax by a dime, boosting tab fees, and calling for Minnesota voters to decide whether the state constitution should be amended to allow all the proceeds of motor vehicle sales taxes to be dedicated to transportation. The estimated revenue from these measures was between $7.5 and $7.8 billion over the next 10 years, still not nearly enough to remedy problems that figure to cost anywhere from $1 to $1.5 billion annually during the same period. (The discrepancy is a matter of whether you're looking at spreadsheets from the Minnesota Department of Transportation or ones from the Itasca Project).

But it was all a moot exercise anyway. Literally wielding a big red VETO stamp to appease the no-tax crowd that remains hell-bent on a something-for-nothing relationship with government, Gov. Tim Pawlenty deep-sixed the bipartisan transportation bill. "How dumb can they be?" he sneered of the lawmakers who dared approve a tax hike to fix the state's roads. (Ironically, it was less than 24 hours later that Pawlenty came back with a proposal to raise the price of cigarettes 75 cents, claiming with a straight face that it wasn't a tax but a "health impact fee." The courts have subsequently ruled that, due to the state's settlement with the tobacco companies, such a "fee" can't be levied. Because Pawlenty refuses to call it a tax, the state is spending time and money to appeal the ruling.)

Well that $300 million per year in "additional" transportation money would have to come from somewhere - and as Democrats pointed out, there was nowhere else to take it other than from the budget for Minnesota schools (50 percent of the general fund) or health care (20 percent).

Minnesota state law does not allow a governor to actually stop a constitutional amendment from going to ballot if it has been passed by the House and Senate, so Pawlenty's veto didn't completely kill the transportation bill. In November, Minnesota voters passed the amendment that required 100 percent of future proceeds from the motor vehicle sales tax (MVST) to be dedicated to transportation. Being that the Minnesota Transportation was financially strapped, passing the amendment was the only solution to saving the roads.

"I support it. Everybody's going to support it," says Larry Pogemiller (DFL-Minneapolis), who chairs the Senate Taxes Committee. "We are part of a large coalition that thinks the constitutional amendment is a good thing," says John Gunyou, former finance commissioner under Gov. Arne Carlson and the current city manager of Minnetonka. "But this was just a small piece of the transportation bill. It is like saying you are for one part of a ten-part plan. What about the other nine parts? This can't be all that we do for transportation. And then the other question is, how do we fix the hole this creates in the general fund?"

Unfortunately the hole in question is the hundreds of millions of dollars (forty-six percent of all MVST revenues) that pays for education, health care, and other general fund expenditures. So when the voters approved the amendment dedicating all MVST funds to bail out their transportation department, they were taking it from their own schools and health care. I'm guessing that they would have rather paid a 10 cent increase on their taxes.

And the saddest part is that this influx of money was only a small percentage of what was really needed to upgrade Minnesota's roads and bridges. And why on earth is Minnesota's transportation system in such dire straights?

Once again, Pawlenty's ace in the hole is a bit of accounting chicanery: Minnesota is the only state in the nation that uses inflation-adjusted revenue projections to estimate what it will take in, but refuses to count inflation when tallying up its spending needs. For example, the Minnesota Department of Finance has already estimated an inflation rate of 3.5 percent for 2006. We are in the first year of a $30 billion general fund budget for the 2006-'07 biennium, meaning that Minnesota's 2006 budget is roughly $15 billion. Well, 3.5 percent of $15 billion is about $525 million. That's how much we'll see on the plus side of the state's ledger early next year simply because of the way we cook the books. When the state is showing such phony surpluses, it becomes much easier to suppose the general fund can afford to siphon $300 million a year out of health care and education, dedicate it to roads, and not have to raise taxes.

Cooking books? Phony surpluses?

It appears Pawlenty has a history of borrowing from the future MSTV payments at a loss. The transportation system desperately needed long-term fixes and quick patching, so in 2006 Pawlenty proposed to borrow $2.5 billion for road projects over four years and pay off the bonds with future motor vehicle sales tax revenues. All to avoid raising taxes to pay for the work.

Three years before, Pawlenty borrowed $800 million in highway and bridge repair money, with the plan to pay it off in 20-year bonds. The money for those bond payments was taken right out of the tens of millions of federal dollars that were supposed to be earmarked for highway maintenance:

"The governor hammered through a plan that doesn't pay for itself," says state Sen. Steve Murphy (DFL-Red Wing), "and so now for the first time in the history of the state, the Department of Transportation is broke. What that means is if someone drives through a guard rail it is not going to be replaced very soon. If someone breaks an axle on a pothole, it is not going to be filled very soon.

"Now the governor wants to borrow $2.5 billion, and it will cost $3.84 billion to pay off those bonds. That's more smoke and mirrors, more money in interest charges instead of potholes. Those 20-year bonds won't be retired for 32 years. Our folks didn't do that to us, but that is the debt we will be leaving our children. They talk about not raising taxes, but that doesn't stop these Republicans from spending money faster than a boatload of drunken Marines."

And the Federal money for highway maintenance that was used to pay the bonds? Federal highway funds are used to fix highways and major bridges.

And so in Minnesota, the roads continued to languish. And I suppose we shouldn't be terribly surprised that eventually... a bridge collapsed.