State government’s role in Minnesota’s shared life involves setting the table for the future. That’s nowhere truer than for state-funded transportation — roads, bridges, transit, bike paths and more. Yet precisely because transportation funding serves the future more than the here-and-now, it’s been easy for lawmakers to neglect. Only one major transportation bill has been enacted in the last 28 years — and that took an interstate bridge collapse to achieve.
Thankfully, no calamity is spurring action this year. But across Minnesota each day, chronic underfunding takes a toll that will only increase if delay persists. Deficiencies that could be fixed with repairs now will require total replacements soon if left uncorrected. The opportunity to be ready to meet a changing population’s needs is slipping away.
With all three parties to state lawmaking — Gov. Mark Dayton and House and Senate majorities — calling for a big step, this is the year to give future transportation needs their due. Here’s how we’d do it:
• Our goal: $9 billion over 10 years; $870 million in year one. That’s positioned between Dayton’s $11.2 billion, 10-year proposal and the House GOP’s $7 billion bid. Those numbers sound huge until they are compared with an expert panel’s assessment in 2012: Minnesota needs an additional $21.2 billion over the next 20 years just to maintain today’s transportation performance. Make the system more economically competitive, and the 20-year tab rises to at least $50.6 billion.
Those are sobering numbers. They should tell lawmakers that if they fail to act this year, a comprehensive correction could climb permanently out of reach. We would:
• Boost registration fees: $150 million in 2016. “License tabs” are a highway-dedicated workhorse that could pull more weight. The fee’s 1.25 percent of value rate for cars less than 10 years old has not been changed since 1981. We’d boost that rate to 1.5 percent and increase the fee’s base level from $10 to $20.
• Add a dime to the gas tax: $300 million in 2016. We’d welcome either an addition to the current per-gallon tax or a new wholesale gross receipts tax. If it’s the former, we’d attach an automatic adjustment for inflation. Without it, the tax’s buying power weakens each year.
Why a higher gas tax? Because it’s a time-tested, accepted, predictable way to pay for state, county and municipal highways. Its constitutional dedication shields it from raids for other purposes. It’s a user fee — those who drive more pay more. To be sure, its growth has slowed in recent years because of increasing fuel economy. But replacing it with a long-studied tax based on miles driven remains a political non-starter.
The GOP alternative to a gas tax increase involves transferring roughly $300 million per year in general-fund tax revenue to highway accounts. That’s tempting when the general fund is running a surplus, as it is now. History shows that when fiscal trouble comes, the political temptation to reverse the flow is even greater.
• Dedicate motor vehicle rental and lease taxes: $75 million in 2016. We’ll take a smaller version of the GOP idea. But we would ask voters in 2016 to dedicate those taxes for the same purposes assigned to the sales tax on motor vehicle purchases (MVST) today: a 60/40 split between roads and transit.
• Increase motor vehicle sales tax (MVST) rates to 6.875 percent: $43 million in 2016. MVST was excluded when voters in 2008 added 0.375 percent to the sales tax to benefit natural resources and the arts. The 6.875 percent rate also should apply to MVST, for transportation’s sake. Both of those MVST moves would modestly increase transit funding. But more is needed. Such projects have long lead times. Fail to start now, and Minnesota will be at a disadvantage in the competition for human capital that will characterize the next two decades. That’s why we favor:
• A 0.5 percent sales tax increase in the metro area, dedicated to transit: $250 million in 2016. It will take an investment on that scale to build planned bus and rail transitways and to upgrade the bus system to levels comparable to other modern cities. The Twin Cities can’t skimp on transit and thrive — and Minnesota can’t afford to stunt Twin Cities growth.
The House GOP proposal’s biggest defect is its failure to accommodate the growing demand for transit. The House bill would not only end light-rail development but also lead to reductions in exiting bus service, Metro Transit analysts say. The proposal is a head-in-the-sand response to the state’s demographic changes that will ill serve a political party that seeks to win future statewide elections.
• A mix of bonding and cash for local roads, bike trails and Greater Minnesota transit: $52 million in 2016. The same demographic trends that compel more transit investment in the metro area are in play throughout the state, and ought not be ignored.
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We recognize that authorizing tax increases this large would be uncharacteristic behavior for politicians whose focus is the next election. But that habitual myopia has resulted in crumbling roads, deficient bridges and limited transit, frustrating Minnesotans every day. Ignore transportation again this year, and the political price for doing so may be higher than legislators imagine.