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Dayton open to approving transportation plan without raising gas tax

Gov. Mark Dayton on Thursday left open the possibility that he would sign a transportation funding plan that does not include a 10-cent increase to the gas tax — a signature component of his transportation proposal.

“I’m not going to veto a transportation bill that’s satisfactory in other respects because it doesn’t have a gas tax,” said the DFL governor, who criticized the hard-line position of Republican legislative leaders who have stridently opposed raising the gas tax.

Dayton’s remarks came as the Transportation Finance Commerce Committee met Thursday in an effort to reconcile differences between the House and Senate transportation budget bills.

“I’m very hopeful that we’ll come up with a bill,” said Sen. Scott Newman, R-Hutchinson, following a wide-ranging two-hour committee hearing.

But it appears as if long-standing differences over funding for metro-area mass transit could still prevent a deal by the end of this legislative session — the same juggernaut that stalled lawmakers last year.

The House transportation bill, in particular, calls for deep cuts to local bus and light-rail service, which provided more than 82 million rides last year, according to the Metropolitan Council.

“I’ve heard lawmakers say time and time again that they aren’t anti-transit, that they support bus [service],” Met Council Chairman Adam Duininck testified. “What these bills do is the complete opposite of that.”

Should provisions of the House bill be adopted, the regional planning body said all Metro Transit bus routes — whether they’re express or local — would be reduced or even eliminated. Twenty to 70 of the system’s bus routes could be cut entirely, the council claimed.

Red Line bus-rapid transit service between the Mall of America and Apple Valley could be pared, as well as weekend service of the Northstar commuter rail, which connects Minneapolis to Big Lake. The council noted that Transit Link, the dial-a-ride service in areas without access to regular route transit, would be cut, too.

Several advocates testified the loss of transit service would adversely affect their lives. Brandishing a Metro Transit Go-To card, St. Paul resident Betty Lotterman said her transit pass was her “most-valued possession” because she cannot drive. Likewise, Amity Foster, who lives in northeast Minneapolis, said she takes transit because she suffers from seizures. “I wonder what I will have to cut out of my life if you cut transit?” she asked lawmakers.

Others testified against the $1.9 billion Southwest light-rail project, which would link downtown Minneapolis to Eden Prairie. David Lilly, from the Lakes and Parks Alliance, which is suing to stop the Southwest line, called the project a “disaster” from an environmental, policy, safety and equity standpoint.

All told, nearly 40 speakers testified about transportation issues they care about — from milk-truck weights to railroad safety to bike paths.

Next week, the committee will get down to the nitty-gritty work of crafting a broader bill. “We need a transportation bill,” Newman said. “The question is, ‘What will that bill look like?’ ”

Earlier, Senate Majority Leader Paul Gazelka, R-Nisswa, said he was encouraged after his meeting with Dayton and House Speaker Kurt Daudt on Thursday morning. He said the House, Senate and governor are “close” to an agreement on the transportation bill, including on issues related to public transit.

“The big issue was [funding for] buses, and we’re open to that,” he said. “We recognize that transit related to buses is important, so we’ll find a number that we’ll all agree with.”

Dayton pointed to other Republican governors and legislatures that have recently approved gas tax increases to fund improvements to roads and bridges.

He’s also proposed a half-cent metro-area sales tax to pay for transit, although it’s unclear whether that idea will gain any traction going forward.

 

Star Tribune staff writer Erin Golden contributed to this report.

Janet Moore • 612-673-7752 janet.moore@startribune.com

 

Minnesota revenue commissioner warns budget cuts could prompt tax-refund delays

 

 

Cuts proposed for the Minnesota Department of Revenue in House and Senate GOP budget plans could prompt tax refunds to be delayed by "months" in future years, the department's top official warned on Tuesday.

 

Revenue Commissioner Cynthia Bauerly criticized the plans passed in both chambers of the Legislature, saying that they'd force her department to cut up to 200 workers and make it harder for the state to collect taxes and fight tax fraud.

 

DFL Gov. Mark Dayton's budget plan for the next two years calls for a $20 million boost for the Department of Revenue from its current funding level. But Republicans, aiming to cut costs from what they see as a bloated department budget, would make significant cuts: a $12 million drop from current funding in the House bill, and an $11 million decrease in the Senate bill. 

 

Speaking to reporters on Tuesday, Bauerly said the GOP proposals would restrict her department's ability to keep up with demand for faster service from a growing population. 

 

"We are hearing from taxpayers that they want refunds faster ... there is a growing demand for customer services, and unfortunately these bills would mean a reduction in those services," she said. 

 

Bauerly took particular issue with the House budget, which also mandates that the state create a free filing system for tax returns by 2018 -- something the commissioner estimates will cost more than $22 million. 

 

But Republicans, including Rep. Sarah Anderson, R-Plymouth, disagree with those calculations. Anderson, the chairwoman of the House State Government Finance Committee, said the free filing system plan is modeled on one used in California, where the state "did not spend a single penny on it."

 

Anderson said the Department of Revenue budget has grown by about $30 million in the three budget cycles. Under Dayton's plan, the budget would grow by 12 percent over the current two-year cycle. The current biennial budget provides about $303 million for the department.

 

Anderson said Bauerly's concerns were overblown, amounting to "Chicken Little crying that the sky is falling."

 

"I think it's a little overly dramatic, and what she's saying is not truly the actual result of these reductions, which are minimal, if you consider that her budget has grown by $30 million in the last six years," she said.

 

Anderson said most of the department's growth has come in the form of personnel costs. 

 

Bauerly said things are running smoothly in the current tax season. By April 10, about a week before the tax-filing deadline, her department had processed 88 percent of the approximately 2 million returns already filed. That amounts to about 1.3 million returns issued so far. Officials expected another 900,000 returns were headed their way. 

 

But looking ahead, she's concerned that a smaller budget will make it hard to keep up the pace, particularly if the Legislature approves tax-code changes that could require additional work. She said Minnesotans are likely to see the impact when they file their returns, or pick up the phone to call with a tax-filing question.

 

"Customer service will suffer, because people will have a harder time getting information from us over the phone," she said. 

 

Lawmakers from the House and Senate will begin refining the budget bill in committee meetings when they return from spring break on April 18. A final version could be sent to Dayton by the end of the month. 

 

Above: Revenue Commissioner Cynthia Baurely speaks about a tax proposal from Gov. Mark Dayton in January 2017. Glen Stubbe/Star Tribune