Value capture for transportation in Minnesota: The rationale
A good way to understand "value capture" is to compare it with other types of transportation finance.
For decades in transportation finance we have been trying to better relate benefits to costs through dedicated revenues. Gas tax is levied on the benefits enjoyed by motorists; congestion price is collected on the social costs (congestion and pollution) led by motorists; and in the case of transit, fare structure has often been re-designed to improve its match with riders' benefits. However, transportation improvements not only bring benefits for motorists and riders, but also create value for landowners, developers, etc. It would be great to recover this value to supplement transportation finance -- this is the idea of "value capture."
In the recent transportation bill the state legislature launches a project to study value capture, which is "financing new and improved transportation infrastructure in Minnesota through capturing the value of the benefits created." Take two notes for this broad definition. First, value capture has potential for all transportation infrastructure, not just transit, of which value capture is most often discussed. This is understandable because transit cannot make use of gas tax and is not quite suitable for congestion pricing either. Second, the value of transportation improvement need not be restricted to land value, the typical target of value capture.