Two developments last week altered Minnesota’s long-running transportation debate in ways that ought to make achieving at least a modest funding increase easier for the 2016 Legislature.
One: In Washington, Congress and the president finally came to a rare bipartisan accord on a respectable five-year transportation funding bill, one that will provide Minnesota with $36 million in additional highway and transit funding this fiscal year and amounts increasing thereafter to $107 million in fiscal 2020.
Two: In St. Paul, a forecast of a $1.87 billion balance in the state budget through mid-2017 turned out the lights on proposals to raise the highway-dedicated gas tax next year. “I think a gas tax increase is dead with this surplus available,” Gov. Mark Dayton acknowledged Thursday.
That’s a disappointing concession for those, including the Star Tribune Editorial Board, who consider a gas tax boost a fair and reasonable way to ease transportation woes. But it’s also a gubernatorial bow to political reality. The House Republican majority’s opposition to a higher gas tax has only stiffened in the face of a surplus that exceeds $1 billion even after a requisite $600 million boost in the state’s reserve fund. Even before the forecast, some DFLers’ support for an increase in the state’s 28.5-cents-a-gallon tax was softening, and their interest in tapping the general fund for transportation purposes — as the House GOP bill does — was growing.
But we hope legislators were also listening a few moments earlier when Dayton warned them: Don’t expect to go very far in permanently diverting money from the general fund to transportation. “A permanent transfer of general fund revenues to the dedicated Highway Trust Fund … must not be so large as to jeopardize our future fiscal stability,” he said. While he would not name a number, the governor said the sum he’ll allow to flow from the general fund won’t be sufficient to meet the state’s transportation needs. A Minnesota Department of Transportation study last month put those needs at $16.3 billion through 2037 — up $4 billion from an estimate through 2033 made only three years ago.
Without a gas tax increase, how can Minnesota come close to amassing that kind of sum? New federal money will help. The sums that President Obama signed into law Friday are not large, but the fact that they’re locked in for the next five years is a plus for transportation planners.
We also hope legislators see that there’s more than one way to raise revenue. They can call a tax a fee — or a license tab. An increase in vehicle registration fees is in order. They can make a tax increase a local option. That strategy has worked well with county-approved wheelage tax increases. It could apply to a boost in the metro sales tax for transit.
Legislators can expand on an idea included in the House transportation bill last session. It would have sent proceeds from the existing sales tax on motor vehicle repair parts — a $234 million item in fiscal year 2017 — to the state’s highway trust fund. Why not add a sales tax on repair services as well as parts? That addition would net $141 million more this year if applied only to consumer repairs, and $33 million more if repairs purchased by businesses were added.
Constitutional dedication of such measures for transportation is also in order. The long time horizons for road and transit projects demand the dependability that only a constitutionally guaranteed flow of funds can provide. The precedent of the 2006 vote on the motor vehicle sales tax should be followed: 2016 voters should be asked whether to dedicate the sales taxes in question on a 60/40 basis — 60 percent for roads, 40 percent for transit.
With more money coming from Washington and with Dayton calling a truce in the gas tax fight, Minnesota lawmakers’ transportation task next session should be less daunting. The work ahead will still require creativity and not a little political courage. But if not to solve chronic public problems like this one, what’s an election certificate for?