Gov. Mark Dayton pressed Minnesota’s business leaders Tuesday for help in passing fuel tax and license tab fee increases for road and bridge improvements at the Legislature this year, a chief priority of the governor as he starts his second term, but one that faces difficult political prospects at the Capitol.
Dayton made his plea at the Minnesota Chamber of Commerce’s annual “Session Priorities” dinner, a tradition of the first week of each legislative session when legislators, lobbyists and administration officials schmooze about politics over dinner and drinks.
Dayton wants lawmakers this year to approve nearly $6 billion in new money over the next decade for what politicians of both parties agree are badly needed repairs to and increased capacity for Minnesota’s crumbling roads and aging bridges.
“I don’t relish having to raise the revenues needed to start repairing 25 years of neglecting Minnesota’s transportation system,” Dayton told the business crowd. “I just consider it my responsibility, and yours.”
The DFL governor’s proposal, which he’s expected to spell out in greater detail later in January, includes as the main funding source a 6.5 percent-per-gallon tax on gasoline at the wholesale level — one he’s estimated would cost drivers about an additional 12 cents per gallon at the pump. Dayton has not yet specified the size of the license tab fee he’ll seek. He’s also proposing a half-cent sales tax increase in the seven-county metropolitan area to pay for transit projects.
The Chamber of Commerce is likely to be pivotal in passing a major transportation package this year, particularly in building support among members of the Republican-controlled House of Representatives. The last time lawmakers hiked Minnesota’s gas tax was 2008, when the Legislature overrode a veto by then Gov. Tim Pawlenty and raised it to the current 28.5-cent-per-gallon rate.
That time, the Chamber’s support for the bill gave a small number of House Republicans political cover to defy Pawlenty. This time, the organization is so far not on board with Dayton’s fuel tax and license tab proposal.
“We don’t think it’s necessary to look at the fuel tax to close that gap,” said Bentley Graves, the chamber’s transportation policy analyst. While the group does want to see additional spending for roads and bridges, Graves said it should come from existing resources: a portion of the state’s current $1 billion surplus, and through cost savings inside the Department of Transportation.
Dayton doesn’t think that’s enough resources to meet the needs of a transportation network with thousands of miles of roads that have outlived their natural life, battered by brutal winters and increasingly stressed by a growing population. In particular, he said it’s a bad idea to divert state general fund resources, in the form of the $1 billion surplus, to roads.
“Shifting ongoing transportation costs to the general fund puts it in competition with all the other demands for tax cuts and spending increases,” Dayton said. The Department of Transportation already has been diligent in achieving internal cost savings, but he said the ability to save money through efficiency is dwarfed by the need.
Without the support of business interests, Dayton and his allies face an uphill battle in getting House Republicans to sign off on tax increases. While many of the new Republican House members ran last fall on a platform of doing more to fix roads and bridges, there’s still major reluctance to raise taxes.
“There’s no mystery that our transportation network is in desperate need of attention,” said Rep. Jim Nash, R-Waconia — but not enough for him to support tax hikes, he said.
“We have seen from voters that we really need to reprioritize our spending toward roads and bridges, and not light rail and transit,” Nash said.
The chamber and Republicans may not be on board with tax hikes. But Dayton is getting support from some prominent business leaders. Earlier Tuesday, at a panel discussion at the Humphrey Institute before a group of lawmakers, U.S. Bank CEO Richard Davis said he believed transportation should be seen as “an investment, not an expense” — and that he didn’t see how all the needs could be met with existing revenue sources.
At the end of his remarks, Dayton threw out another transportation fix he wants to see: better synchronizing of Twin Cities stoplights.
“Think of the savings in real time, fuel consumption and road rage if all those traffic lights allowed people to move forward,” Dayton said.