Legislature sends gas-tax bill to veto-ready governor

After a roller-coaster day of political jockeying, a multi-billion-dollar state transportation plan sat in limbo — gaining important new endorsements and clearing both houses, but lacking a clear sign that it can survive a promised veto from Gov. Tim Pawlenty, who believes it is too costly.

After a roller-coaster day of political jockeying, a multi-billion-dollar state transportation plan sat in limbo -- easily clearing both houses of the Legislature, but lacking a clear sign that it can survive a promised veto from Gov. Tim Pawlenty, who believes it is too costly.

The $6.6 billion initiative, which would raise the state gasoline tax for the first time since 1988, was passed first by the House and then by the Senate after hours of debate Thursday.

DFLers had spent the day scaling back several tax increases in the measure and by midday had gained the support of the Minnesota Chamber of Commerce, one of the state's most influential lobbying groups.

Although the move appeared to gain critical Republican support for the bill, by early evening the 89-44 outcome in the House had DFLers contemplating a sobering message: They were one shy of having the votes to override the governor.

Thursday's votes, six months after the Interstate 35W bridge fell, left unclear whether that tragedy would end a multi-year impasse over increased transportation funding.

Now, and through the weekend, a torrent of lobbying is expected as DFLers prowl for extra votes in the House and Republicans try to keep that from happening.

The margin in the Senate was 47-20, with all 45 DFLers and two Republicans backing the bill, more than enough votes to override a veto.

In the House, 83 DFLers and six Republicans voted for the bill, while 42 Republicans and two DFLers opposed it.

DFLers said the tax increases in the bill would cost $126 annually for a family of four earning between $49,000 and $79,000 a year.

'Is $126 too much to ask?'

"Is $126 too much to ask for safe roads, safe bridges?" asked Sen. Steve Murphy, DFL-Red Wing, the chief Senate author of the bill. Murphy, echoing an earlier DFL threat, said party leaders would not propose another transportation plan this year.

The bill would raise the gasoline tax by 5 cents a gallon by mid-September and add as much as another 3.5 cents until bonds that finance transportation projects are paid off. Under another provision, license tab fees on many cars and trucks, particularly luxury vehicles, would increase.

In addition, county boards in the seven-county metro area could impose a quarter-cent sales tax and a $20 excise tax on new vehicles. The revenue from the sales tax would go toward transit. No referendum would be required.

Outstate counties could impose a similar sales tax, up to one-half cent, for specific road improvements, but only with voter approval. That tax would end when the project is completed.

Much of Thursday's debate appeared to center on political timing. House Republicans unsuccessfully pushed a plan that would delay the bill's passage until a new state revenue forecast, which is expected to be gloomy, is released next Thursday. Republicans accused the DFLers of wanting to pass the legislation, with its tax increases, before the forecast raised more doubts about the wisdom of passing it in the face of an economic downturn.

Cost was cut $2 billion

With Thursday's changes, especially in the metro sales taxes, the bill's cost over the next decade was reduced by nearly $2 billion from the plan DFLers had introduced just over a week ago.

"On Aug. 1, 2007, the transportation debate in the state of Minnesota changed, and it changed dramatically," said Rep. Al Juhnke, DFL-Willmar, referring to the bridge collapse. "We haven't lifted one finger to address that funding crisis."

Republicans spent the day characterizing the legislation as bloated and unnecessary.

"[It's] the largest tax increase in modern Minnesota history," said Rep. Paul Kohls, R-Victoria. He said the DFL's plan was "not courageous, it's not leadership, it's arrogance."

Said Rep. Mark Buesgens, R-Jordan: "There's more spin going on on the House floor than a well-greased Tilt-A-Whirl. We're taking from the taxpayers. Let's call it what it is."

In securing the House chamber's support, DFL leaders agreed to lower the proposed metrowide sales tax from one-half cent to a quarter cent, said that only the seven counties in the Twin Cities metro area could participate and pledged that all of the money -- an estimated $1.1 billion over 10 years -- would go to transit.

The state Chamber of Commerce immediately released a letter saying that while the proposal was "not perfect," it was urging legislators to support the plan.

As the debate continued Thursday, a variety of groups, including the state's pork producers and soybean growers, pledged their support.

Shortly after the Chamber of Commerce expressed its support, DFLers said the political results could be seen. A preliminary vote on the plan received 98 votes in the House -- eight more than needed to override the governor's promised veto. Among the yes votes were 13 Republicans, including eight who had voted against last year's transportation bill.

Erin Sexton, a Chamber of Commerce spokesperson, said the governor was "disappointed" with the organization's endorsement. "This is a struggle for us," she said.

While some Republicans applauded the chamber's move -- Rep. Jim Abeler, R-Anoka, said it showed "courage" -- its impact seemed to fizzle with Thursday evening's final House vote.

Pawlenty met with caucus

On Wednesday, in what some described as a sometimes-acrimonious session, Pawlenty met with members of the House Republican caucus for about half an hour, reiterating his opposition to the bill.

"He made it clear that governors don't like to have their vetoes overridden," said Rep. Dean Urdahl, R-Grove City.

Pawlenty spokesman Brian McClung said late Thursday that changes made to the bill during the day are largely cosmetic and were not enough to change the governor's opposition.

"This is no time for a tax increase," McClung said. But he would not say how quickly Pawlenty would cast his veto and send the bill back to the Legislature, where the struggle to override the governor will then be joined.

mkaszuba@startribune.com • 651-222-1673 mbrunswick@startribune.com • 651-222-1636

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