Selling a gas tax increase 11 years ago to enough Republican legislators to override a Republican governor’s veto was one thing. (OK, it was one big thing, seldom seen in today’s highly tribal American politics.)
But, Margaret Anderson Kelliher, could you sell DFL Gov. Tim Walz’s proposed 20-cent-per-gallon increase to your four brothers in greater Minnesota — two of whom have confessed to their DFL sister that they voted for President Donald Trump?
“I think I could,” the new state transportation commissioner and former Minnesota House speaker allowed last week, in a voice that betrayed an uncharacteristic qualm of uncertainty.
Kelliher may be a big-city politician who represented Minneapolis for a dozen years in the state House and helped engineer a 8.5-cent-per-gallon gas tax increase in 2008, the first and only boost in the highway-dedicated tax since 1988. Her most recent foray into elective politics came last summer in the DFL Fifth Congressional District primary, which she lost to Ilhan Omar.
But Kelliher is also a farm girl and former state 4-H president from Lake Crystal whose four older brothers live in the Mankato area. She knows well that metro and rural ideas about transportation funding (and a good deal more) have diverged in recent years, sometimes dramatically.
She knows too that the fate of Walz’s proposed $1.9 billion in new transportation funding over the next four years likely hinges on the ability of the governor and transportation commissioner to sell those in greater Minnesota on paying more at the pump. The highest political hurdle the Walz plan faces this year is in the state Senate, where the Republican majority caucus is predominantly non-metro.
Kelliher said she last spoke with her brothers about her new job at their mother’s 95th birthday party, shortly before Walz’s gas tax proposal was released. She didn’t tell them that the governor who once taught at Mankato West High School was about to ask for a series of four nickel-per-gallon increases, one every six months for the next two years, followed in 2023 and thereafter by an annual adjustment for inflation. It would mean a whopping 70 percent increase in the state gas tax by 2022.
But she did ask her kinfolk whether they see a need for state government to spend more on the roads they drive. The answer was a resounding yes, she told me last week. “They said, ‘We need it. We can see it every day,’ ” she related.
What’s more, she said, they agreed that roads and bridges should be financed by funds raised and reserved for that purpose.
It’s that latter point that’s much in contention at the Capitol. Republicans argue that the gas tax, license fees and motor vehicle sales taxes that have been earmarked for roads, bridges and transit need not be increased to keep Minnesota moving. Rather, they say, the income and sales taxes that fill the state’s general fund can be tapped for several hundred million dollars a year. That’s not enough to fund big projects, but it can fill the potholes and keep the bridges up.
That argument carried the day in 2017-18, when Republicans controlled the Legislature and the state budget was firmly in the black. It’s less potent in 2019, both politically and practically. DFLers now control the state House, 75-58. The economy is slowing; state revenues are sputtering. Demographically driven demand on the general fund for education and health care spending is growing.
The new governor won a solid election victory in 2018 on a promise to do better by education. Kelliher says Walz concluded that keeping that promise requires ending transportation’s drain on the general fund. Seven cents of Walz’s proposed 20-cent-per-gallon increase would reverse that GOP policy.
The MnDOT chief acknowledged that a reverse-shift is harder to sell in greater Minnesota than in the metro area. The reasons are several. Greater Minnesota incomes are lower, increasing aversion to any tax increase, particularly one not based on ability to pay. People in greater Minnesota drive more on average, which means they pay more per capita in gas tax. They are susceptible to believing that the metro area road and transit projects get a disproportionate share of those dollars.
It’s not so, Kelliher counters. Greater Minnesotans get considerably more state transportation spending per capita than metro dwellers do. They also pay on average less in vehicle registration fees, which are a growing share of state transportation funds.
Those are the facts she intends to present in coming weeks to greater Minnesota audiences. She also said she’ll emphasize this: With no change in MnDOT’s current funding scheme — which includes an annual infusion of several hundred million dollars from the general fund — highway improvements will soon be unaffordable. Maintenance alone already consumes 70 percent of state road-and-bridge funding, she said, and its share of the pie is growing fast.
In other words, sticking with the no-new-gas-tax Republican plan won’t make Hwy. 14 safer or shore up the Blatnik Bridge in Duluth. “We’ve got to get beyond a 15-cent increase to really see benefit to the system,” Kelliher said.
Is that a winning argument? I’d call it a start. Kelliher and Walz have a few more points in their policy quiver that they’ll need to vigorously employ. For example:
• A separate Walz proposal to enrich the Working Family Tax Credit for low-income Minnesotans shouldn’t be so separate. Kelliher says it was included in the governor’s budget to ease the burden of a higher gas tax on lower-income people. For some families, the higher credit might more than make up for their additional fuel costs, she said. The two proposals should be presented as a package.
• To his credit, Walz is staking a claim as a clean-energy governor. But his emphasis to date has been on the ongoing transition to carbon-free electricity generation, not the coming transition to electric vehicles. That latter change appears ready to take off in the next decade. It’s not unrelated to greater Minnesota concerns about higher gas taxes.
Will electric vehicles be excused from paying their fair share of road costs? Will they prove more viable in the metro area than outstate — and thus become another stanza in the blues song about greater Minnesota being left behind? Will people in greater Minnesota, especially those unable to afford new vehicles, be stuck paying an ever-larger share of state highway costs?
Those are worthy questions. How Minnesota will pay for transportation infrastructure as the public and private fleet goes electric is too big an issue to be settled in one year. But this is the right year to start finding answers. (At least one Republican state senator evidently agrees: Jeff Howe of Rockville is sponsoring a bill to boost the state’s annual electric vehicle fee from $75 to $250.)
• The GOP notion that the state’s general fund can in perpetuity meet Minnesota’s education and health care needs, stay in the black and provide for transportation too should be challenged head-on.
The governor is employing that message. But he has a commissioner whose very presence at the Capitol evokes memories of the fiscal trauma of 2008-13, when, as Kelliher puts it, “we struggled to find every dollar we could take to fund education and health care and it still wasn’t enough.”
When Republican legislators assert that the general fund can adequately support transportation, the former House speaker has a ready answer: “May you never have to live through another 2009.” Coming from Kelliher, those words should give pause.
Lori Sturdevant is a retired Star Tribune editorial writer and an occasional columnist. She is at firstname.lastname@example.org.