DFL legislators in the Minnesota Senate pitched their plan on Monday to fix the state's aging roads and bridges — a template that would raise at least $800 million a year through a wholesale gas tax and by increasing other taxes and fees, including license tabs.
The plan also calls for increasing a metro-area sales tax to pay for public transit — including the controversial $1.65 billion Southwest light-rail line.
"This is a serious problem that requires a serious solution," said Sen. Susan Kent, DFL-Woodbury, who appeared with several colleagues at a news conference to unveil their plan.
The proposal, authored by Minneapolis DFL Sen. Scott Dibble, who chairs the Senate transportation committee, has as its centerpiece a sales tax on gas at the wholesale level of 6.5 percent a gallon. That would be on top of the existing 28.5-cents-per-gallon state gas tax.
That's identical to a proposal from Gov. Mark Dayton, who has identified a big transportation spending boost as a top priority of the new legislative session. Dayton also has advocated a license tab fee increase and a metro sales tax for transit.
Republicans, who hold the House majority, have also called fixing roads and bridges a priority; yet GOP legislators have been much more reluctant to sign on with tax increases. Last week, House Republicans proposed an additional $750 million in transportation funding in the next four years, in part by tapping into the state's $1 billion surplus. Dayton last week blasted the plan as not nearly sufficient.
"I can't think of another path" to raising the kind of money needed to repair and replace thousands of miles of crumbling roads, hundreds of aging bridges while also increasing road capacity with a few key projects, said Sen. Vicki Jensen, DFL-Owatonna.
DFLers, many of whom represent swing districts, acknowledged the political difficulty of a proposal that would demand more money from every Minnesota driver.
The two parties are also likely to square off over transit funding. The DFL plan to increase the transit portion of the metro sales tax to one cent (from 0.25 cents) would raise about $251 million in 2016, costing an estimated $1.30 a week for the average metro resident. The bulk of the funds would back transit projects in the metro area, with a small percentage set aside for bike and pedestrian infrastructure.
A flash point appears to be Southwest light rail, a project linking downtown Minneapolis to Eden Prairie that requires $121 million more from the state to proceed. Republicans, including House Speaker Kurt Daudt, R-Crown, repeatedly have opposed spending any state dollars on the project. Daudt reiterated his opposition to the 16-mile route on Monday.
"With a 6.5 percent sales tax on wholesale gas, a 1-cent metro sales tax increase and higher car registration fees, the proposed Senate DFL tax hike will hit the pocketbooks of Minnesota's middle-class with a vengeance," said Mark Drake, president of the GOP-affiliated Minnesota Jobs Coalition, in a statement.
Both sides appear to agree that Minnesota's roads and bridges need help, but there's a disconnect over how to pay for improvements. The debate comes as federal transportation dollars, which provided $721 million for state transportation projects in 2013, are shrinking because there are fewer drivers on the road and more of them are driving more efficient vehicles.
A panel of transportation experts that Dayton convened in 2012 said that about $6 billion in new money is needed in the next decade just to keep the state's current system of roads and bridges in decent working order.
Tax tied to roads, bridges
The amount motorists would pay under the wholesale gas-tax plan would depend on the price of gas, which is volatile. Such a tax would be constitutionally mandated to pay for roads and bridges, Dibble said.
His plan calls for an increase in vehicle registration fees (or license tabs) from $25 a year to $30 for vehicles more than 10 years old, and from 1.25 percent to 1.5 percent on the value of newer vehicles.
Dibble's bill includes issuing $567 million in general obligation bonds for local road and bridge repair and replacement, as well as rail grade and crossing improvements.
In addition, $800 million in trunk highway bonds raised over four years would pay for "Corridors of Commerce," key thoroughfares that retain business and spur economic development, and $200 million over the same period for transportation-oriented economic development initiatives.