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Transportation group begins push for tax hikes

  • Blog Post by: Baird Helgeson
  • February 18, 2014 - 5:22 PM

A coalition of transportation advocates is seeking more than $700 million in new tax money each year to pay for roads, bridges and transit.

Leaders of the group, Move MN, say the state’s transportation system is crumbling and inadequate, and that the state is falling further behind other economic hubs like Washington State.

“We’re not taking care of what we have – roads and bridges – and we’re not adapting fast enough to meeting growing demand for transit, bicycling and walking options,” said Barb Thoman, executive director for Transit for Livable Communities.

Move MN is seeking a wholesale gas tax hike of 5 cents per gallon and an increase in a metro area sales tax to raise the bulk of the money. The coalition of 150 members also wants to close a tax loophole that would send about $32 million in lease car sales taxes to transportation funding.

The proposal unveiled Tuesday does not have support of legislative leaders as they head into an election year.

“Without the support or involvement of Republicans in the Legislature and leaders in the statewide business community, the legislature will not be in a position to move a comprehensive transportation package in the 2014 session,” said House Speaker Paul Thissen, DFL-Minneapolis.

Republicans immediately criticized the proposed tax hikes, which would put Minnesota among the states with the highest gas tax. They said the proposed tax on wholesale gas would actually amount to a 15 cent per gallon bump at the pump, once the other taxes are layered on top of it.

“We’ve been down this path before,” said state Sen. David Osmek, R-Mound.

Supporters estimate the true cost at the pump would be closer to a dime per gallon, about $2 more per week.

Legislators failed to pass similar gas and transit tax increases last year. DFL Gov. Mark Dayton argued against last year’s gas tax proposal, saying state leaders would endure a firestorm of criticism and not raise enough money to do much good. He is challenging state transportation officials to devise a far more ambitious plan that the public could support, and then find a way to pay for it that taxpayers can live with.

Minnesota Transportation Commissioner Charlie Zelle said the state has fallen billions of dollars behind on transportation finding, and gas tax money is lagging as cars get more fuel efficient.

Minnesota faces "a perfect storm" of reduced funding and increased demand and expectations, he said.

Margaret Donahoe, executive director of the Minnesota Transportation Alliance, pressed legislators to act soon.

“We need greater investment in transportation around the state to promote economic growth,” she said. “We think it is very urgent for the Legislature to take action on this.”

© 2014 Star Tribune