No Section

Budgeting by constitutional amendment is a bad strategy

Minnesota legislators don't need to ask voters to boost transportation funding.

By Editorial Board

April 11, 2018 at 11:06PM

A proposed constitutional amendment would provide much-needed funding for Minnesota roads and bridges, but the funding mechanism could come at the expense of education, social services, local governments and other general fund needs. Here, Interstate 694 westbound was backed up in Fridley during rush hour. (The Minnesota Star Tribune)

Transportation funding temptation is dangling before the Minnesota Legislature this month — and if the tempters have their way, the bright-but-false promise of a painless increase in money for roads and bridges will be put before November's voters, too. Legislators should steel themselves and spare voters from such temptation.

To be sure, much-needed funding for roads and bridges would be delivered by a constitutional amendment that would permanently divert from the general fund the tax receipts on auto repairs and vehicle leases and rentals, some of which were directed to transportation by statute last year. The total flow would start at $340 million in fiscal year 2020, ramp up to $455 million in 2023 and keep climbing thereafter.

But that transfer would carry a hidden cost. It would come at the expense of education, social services, local governments and the rest of the needs that the general fund meets. It would invite other advocates of popular causes to push for constitutionally dedicated revenue of their own, as education groups have threatened to do. And that in turn would erode the ability of the elected branches of state government to control the public purse one state budget at a time, as the Constitution intends.

The legislators who back the proposed constitutional amendment are aware of those costs. But they deem the price worth paying in order to boost highway funding without imposing a new tax or increasing the taxes already constitutionally earmarked for transportation — the gas tax, license tab fees and motor vehicle sales taxes.

The amendment's chief sponsor, Sen. Scott Newman, R-Hutchinson, points to the state's well-documented need to increase highway funding and to the advantages of a dependable flow of funds for infrastructure planning and construction. A 2012 Minnesota Department of Transportation analysis found that just maintaining the current condition of Minnesota's state, county and state-subsidized municipal roads in the next two decades will require a $700 million annual boost in existing transportation funds.

We share that concern. But we are also aware that an aging population, federal funding cuts for health care and the economy's increasing demand for educated workers will put considerable pressure on the general fund in coming years.

That's why we favor a tax increase for transportation's sake. We'd look first to the tax that Minnesotans constitutionally dedicated to road costs in 1924 — the gas tax. At 28.6 cents per gallon, Minnesota's gas tax now ranks 25th in the nation, lower than the rates in neighboring Wisconsin, Iowa and South Dakota. The Legislature has not increased it since 2008; that year's 8.5-cent boost came after 20 years of neglect.

Critics of a gas tax increase note that hybrid and electric vehicles are diminishing the tax's potency as a revenue-raiser. They are right. Lawmakers should start planning to eventually replace the gas tax. But their plans ought not involve a backdoor raid on funding for other needed government services.

The amendment's supporters correctly note that all but about $55 million that the amendment would direct to road funding in fiscal 2020 is already assigned there by statute, enacted last year. But statutory spending can be altered every time the Legislature meets. A constitutional dedication cannot. Newman's amendment would lock into the Constitution the priorities set in a year when the state's economy was strong and government revenue ample. Those conditions are sure to change one day. When they do, lawmakers should be free to respond.

Future Minnesotans who look to the general fund for needed services "are just going to have to share it," Newman told an editorial writer last week. On behalf of those future Minnesotans, we plead with legislators to be mindful now of their needs. DFLers on the Senate transportation committee proposed that if the amendment goes to the Nov. 6 ballot, the ballot question should disclose that it "would reduce the support available from the general fund for education, health care and local government aid." That language was rejected on a party-line vote.

We also urge legislators to consider that highways and bridges are not state government's only transportation responsibility. Metro Transit would receive none of the funds that the amendment would dedicate, though Greater Minnesota transit would benefit. That, too, should be made plain if this amendment is put before the voters.

Better, though, would be legislators awakening to the fact that they need not ask the voters to direct more money to transportation. They already have all of the tools they need — the authority, the constitutionally dedicated taxes and the duty — to meet the state's transportation needs themselves.