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The question of Infrastructure spending is a major debating point in the media and corridors of power these days which it certainly should be. Funding for the nation's highways, bridges, tunnels and roads is of great importance and becoming a hot button issue for politicians and adminstrators both on the local and national level. The reliance of our economy on road freight, interstate trucking, urgent freight and hot shot trucking is clearly growing, yet the necessary funding for infrastructure projects tends to be handled like a hot potato.

Each morning I read more and more headlines from different states and cities about new taxes, road tolls, or vehicle license fees each designed to help cover some of the costs of urgent projects that are needed to keep the arteries of our nationwide transportation grid flowing efficiently. It's typically a difficult sell to the general public, asking people and businesses to pay more for improvements that can take many years to complete but which ultimately will provide the dividends of improved economics, congestion relief and safety improvement over the next decade and beyond. For urgent freight there is of course the added benefit of cost savings when journeys are more efficient and less time is spent in traffic. 

In light of this I read with interest about a new method for transportation funding being considered in Minnesota which proposes that rather than have transportation users foot the entire bill for all improvements some costs could be covered by those who specifically benefit from projects that improve roads or mass transit.

Can such targeted funding truly work though? The concept is that if a specific stretch of highway was for example to have a brand new exit constructed that the local businesses, landowners and residents who would see improved property values from the improvement would foot more of the costs for the localized improvements.

Such zoned taxing would be orchestrated by creating districts anticipated to benefit due to the forthcoming infrastructure improvements. It's a very interesting idea and is explained by David Levinson, a professor at the University of Minnesota who has studied value capture quite succicntly

"The people who are getting all of the benefits, or many of the benefits, from the infrastructure are adjacent landowners. The people who pay for the infrastructure are not generally those people. So there's a mismatch. Value capture is a way of essentially trying to close the feedback loop so people who are benefitting ... help pay for it."

The Minnesota Chamber of Commerce are giving due consideration to the idea of value capture but as with all funding initiatives it would, if enacted, be sure to attract controversy. While there is some inherenent logic to having costs underwritten by targeted beneficiaries it's those same people and businesses who are most likely to voice strong opposition.

Minnesota hot shot trucking highway construction

 In reality it might have very specific practical applications such as a new mass transit station or highway exit as I wrote about but I'm not sure how improving a 40 mile corridor of highway could be fairly and appropriately targeted when such benefits are far more difficult to measure.

Value capture is a concept that might bring another option to the table for our seriously underfunded infrastructure projects and for that it should be applauded, but a winning solution to local and national challenges still seems to be somewhere off in the distance.

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