Road money burning a hole in state's pocket

A day after voters changed the Minnesota Constitution to dedicate more money for roads and transit, transportation leaders were already eager to put the additional millions to work building new highways and a light-rail line connecting St. Paul and Minneapolis.

Nearly 60 percent of all voters casting ballots in the election Tuesday embraced a constitutional amendment that locks in all proceeds from the 6.5 percent vehicle sales tax for transportation. Lawmakers have typically used about half of the revenue for other state needs.

Support for the amendment was strongest in the metro area, where overcrowded park-and-ride lots and traffic jams are a part of life. While most of the state favored the amendment, opposition was strong in the Iron Range and Moorhead, where the City Council took a stand against it.

A bipartisan, broad-based coalition led a $3.6 million publicity campaign that featured a catchy "Vote Yes MN" license plate logo. It overcame the amendment's awkward language and opposition from teachers, farmers and outstate cities.

"I think it passed because Minnesotans actually are worried about transportation and this is a message they sent to the Legislature that we have work to do," said David Olson, president of the Minnesota Chamber of Commerce, a major backer.

Passage of the amendment is a huge victory for transit, because it provides the first secure source of funding, roughly $120 million per year, part of which can be used to match federal funds for new rail lines and busways.

The money delivered by the amendment will be phased in over five years, eventually adding up to about $300 million a year more for transportation. The promise of the money immediately eased concerns about possible bus service cuts and made it less likely that other road projects will be bumped to get the long-delayed Crosstown-35W reconstruction project going in 2007.

Officials Wednesday reviewed plans to pay for the Central Corridor light rail line between downtown Minneapolis and St. Paul with some of the money provided by the vote.

And newly reelected Gov. Tim Pawlenty will return to the Legislature in January with plans to borrow $2.5 billion against the new funding to improve roads. Legislators have been reluctant to take on that much debt and Senate DFLers last year determined that $1.7 billion is the maximum the state could pay back with the extra vehicle sales tax revenue.

Bob McFarlin, assistant to the state's transportation commissioner, said Pawlenty is open to discussions over the exact amount but "bonding is the only way to get the power of the amendment to road projects as quickly as possible. We can borrow against it and work on projects like Hwy. 100 and 610 far sooner."

Those who opposed the amendment said its passage merely shifts money in a tight budget.

"This is not going to be free money," said former Rep. Dan Dorman, R-Albert Lea, who joined an unsuccessful lawsuit to remove the amendment from the ballot. "It creates a hole in the budget."

Judy Schaubach, president of Education Minnesota, who objected to guaranteeing funds for transportation, said "we will wait and see if we are able to do this without harm being done to education and health care and other needs that the state has."

The language of the amendment said roads would receive no more than 60 percent of the sales tax proceeds and transit at least 40 percent. Supporters say the guarantee for transit was a key reason the amendment passed.

"Minnesotans are hungry for more transportation choices," said Minneapolis Mayor R.T. Rybak. "The amendment gives us the stability we need to protect current service and a good start on building a 21st-century transportation system in this state."

Rep. Ron Erhardt, R-Edina, said he will once again advocate to raise the gas tax or tab fees or metro sales tax. With a $1.5 billion annual gap in funding for transportation, the extra $300 million a year provided by the passage of the amendment is "a down payment, but it certainly is not going to solve all of our problems."

Laurie Blake • 612-673-1711 • lblake@startribune.com