By Janet Moore
A broad-based coalition of interests known as Move MN has proposed increasing transportation spending by $856 million a year over 10 years, aimed at improving the state’s transportation network.
"By 2025, Minnesota’s entire transportation system will be on life support as congestion, reliability and safety concerns put our state’s long-term economic health at risk," said Margaret Donahoe, executive director of the Minnesota Transportation Alliance and co-chair of the Move MN group.
Donahoe said the proposal would cost the average driver about $1.60 a week – the price of a cup of coffee (assuming it’s not fancy). Businesses would incur about 40 percent of the proposal’s tax burden.
Move MN has proposed a series of fees and taxes to improve the state’s roads, bridges, transit, bike and pedestrian infrastructure. They include:
Applying the state’s 6.5 percent sales tax to the price of fuel, a move that would raise $4.2 billion over the next decade, or $422 million annually. The sales tax on fuel would be calculated into a cent-per-gallon tax that is adjusted annually to reflect the changing price of gas. When applied at the pump, Move MN says the state’s gas tax would increase by about 14 cents a gallon. Several states nationwide have already begun to switch from a per-gallon gas tax to a sales tax (also known as a gross receipts tax).
An increase in the Twin Cities seven-county metro area’s sales tax by three-quarters of a cent to largely pay for public transit, a move that would raise $3.4 billion, or about $342 million a year. A small portion of this fund (about 10 percent) would be used to fund bike and pedestrian connections and pathways in the Metro. This would bring the seven-county sales tax for transit up to a penny.
Raising license tab fees by 10 percent would accrue about $60 million a year over the 10-year period. Now, Minnesotans with cars 10 years or older pay an annual tab fee of $35, an amount that has not been raised in more than two decades. Tab fees are also calculated by imposing a 1.25 percent tax on the present value of the vehicle. Move MN calls for the legislature to adjust the minimum annual fee, raise the current tax rate, or do both, creating a pot of money to fix roads and bridges.
Closing the leased vehicle sales tax “loophole” would raise $32 million a year. This involves dedicating all the leased vehicle sales tax to suburban highway and outstate transit funding.
Move MN also proposed reallocating $16 million a year in current federal transportation funds to help outstate communities build bike and pedestrians connections.