MnDOT: highway user tax revenues rising in nominal terms but a nearly $1.9 billion shortfall remains

Mnesota Department of Transportation Chief Financial Officer Josh Kannatter Heubinger told the House Transportation Committee on March 19 that Minnesota’s Highway User Tax Distribution (HUTD) fund generated just under $2.7 billion in fiscal 2024 but projected needs for the trunk highway, county and municipal systems create about a $1.9 billion annual shortfall.

Heubinger said the HUTD fund’s three primary revenue sources are the state gas tax, motor vehicle registration taxes and 60 percent of the motor vehicle sales tax, and that registration taxes overtook gas taxes as the single largest contributor in 2024.

The report required by statute asked MnDOT to estimate needs over a 10-year horizon and propose options to narrow the gap. Heubinger said the department used its 20-year trunk-highway plan as the baseline, which previously showed a roughly $890 million-per-year shortfall for MnDOT’s trunk-highway share; when MnDOT constructed comparable need estimates for counties and cities the combined HUTD shortfall came to about $1.9 billion per year, roughly an 80 percent increase over current revenues.

Why it matters: committee members said they wanted clear context for state transportation planning as lawmakers consider competing priorities. Members pressed MnDOT on how much of the gap pays for maintaining existing roads versus expansion, whether recent legislative changes reduced the gap and what internal efficiencies the department has identified.

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