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The task force offered two options for raising the gas tax over 20 years. Either way, the tax hike would be expected to raise an additional $15 billion for highways.

Glen Stubbe, Star Tribune

State panel calls for gas tax hikes

  • Article by: PAT DOYLE
  • Star Tribune
  • November 30, 2012 - 11:36 PM

Gas taxes would rise 40 cents per gallon over two decades to pay for highway improvements under recommendations of a task force set up by Gov. Mark Dayton.

The proposal was included in a report released Friday that sounded an alarm for dramatic action to find funding for highways and bus and rail transit.

Raising gas taxes was supported Friday by a key Republican who was a member of the task force.

"I would favor some version of that," said Rep. Mike Beard, R-Shakopee, who chaired the House transportation finance and policy committee when Republicans controlled the Legislature. "I think raising the tax to meet the need is a responsible thing to do."

The report was issued by a task force Dayton created a year ago to recommend new ways to address a shortfall in transportation funding. "If Minnesota wants to maintain its competitive advantage, significant additional revenue will be needed during the next 20 years to address this gap and provide an economically competitive, world-class transportation system here in Minnesota," the report said. "This is an ambitious goal that can only be achieved with a bold vision."

Dayton spokeswoman Katharine Tinucci said Friday that Dayton "has not yet had the opportunity to review the recommendations in any detail, but I know his initial thought is that there is not a real strong appetite for an increase to the gas tax."

The task force offered two options for raising the gas tax over 20 years. One would involve a 10-cent-per-gallon increase the first year, with 1.56-cent increases in each of the next 19 years.

The second option would increase the tax 3.5 cents per gallon in each of the first five years, followed by annual 1.5-cent hikes during the next 15 years.

Either way, the increase would be expected to raise an additional $15 billion for highways. A 40-cent hike would be a roughly 140 percent increase over the current per-gallon tax.

The last time the Legislature voted to increase gas taxes was in 2008, when it approved an 8.5-cent increase phased in over several years. It passed over the objections of most GOP legislators and the veto of then Gov. Tim Pawlenty.

A year ago when Dayton announced creation of the task force he said the panel should think big. "I'm not interested in nickel-and-dime modifications to our status quo because our status quo is getting worse," he said at the time.

A spokesman for the Minnesota Department of Transportation said Friday that increasing the tax gradually would soften the impact on consumers.

"The key is that it's over 20 years," said MnDOT spokesman Kevin Gutknecht, describing the smaller increases in the later years as keeping pace with inflation.

While Beard said he favored an increase in the gas tax, he stopped short of endorsing the size of the one proposed by the task force.

"What I like about it is it's dedicated to roads and bridges," Beard said. "It's a user fee dedicated to benefit the users who pay for it."

Beard was cool to other proposals for tax and fee increases totaling $20 billion over two decades for highways and bus and rail transit.

The task force recommended increasing the metro sales tax by a half-cent to pay for bus and rail transit. The metro area already uses a quarter-cent sales tax to help pay for transit. The increase would be expected to bring in an additional $200 million a year or about $4 billion over two decades.

The task force also recommended increasing vehicle registration fees for highways.

The recommendations are expected to help shape discussion next year at the Legislature on transportation funding.

The 19-member panel included two DFL and two GOP legislators, the commissioners of MnDOT and the Department of Employment and Economic Development, as well as business and labor leaders.

Pat Doyle • 612-673-4504

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