Dayton seeks to clarify gas tax remark from Moorhead debate

Gov. Mark Dayton's proposal to tax wholesale gasoline to fix the state's roads and bridges, offered during Wednesday's gubernatorial debate in Moorhead, Minn., came back to haunt the DFL incumbent Thursday.

In response to a question on which bills candidates would pursue in the next legislative session, Dayton said he would propose a "sales tax on gasoline" intended to raise the $6.5 billion needed over the next decade to keep the state's transportation infrastructure in good repair.

By Thursday, the DFL incumbent was seeking to clarify and tamp down his remarks, saying at a news conference, "I didn't phrase my response very well."

He said he is considering instead a gross receipts tax on wholesale gas as part of a larger transportation funding proposal still to be finalized. That wholesale tax eventually would trickle down to consumers, he said, though it's unclear by how much.

"The money is not going to come from Washington. It's not going to come from the sky," Dayton said Thursday in calling for new sources of revenue.

Dayton said he opposes raising the state's fuel excise tax, a duty Minnesota drivers pay at the pump, because it would unfairly burden lower-income residents. That rate is currently at 28.5 cents a gallon and hasn't been raised since 2008.

Republican challenger Jeff Johnson quickly pounced on the governor's remarks. A spokesman said in an e-mail statement that the governor was reversing his position after making a gaffe. "It is clear Mark Dayton is not a full-time, engaged governor and doesn't appear to be in charge of his own administration," said Jeff Bakken, a Johnson campaign spokesman.

The candidates, including Independence Party gubernatorial hopeful Hannah Nicollet, all said transportation funding should be a legislative priority in 2015.

None of them offered specifics beyond possibly issuing more state bonds, and Dayton said he wasn't "wedded" to the wholesale gas tax proposal. The Republican challenger, drawing a clear line, said he would vehemently oppose any tax hikes to make up the transportation funding shortfall.

Move MN, a Twin Cities-based transportation advocacy group, has said that the state's "crumbling and outdated" infrastructure will hinder Minnesota's economic growth, affecting employers' ability to grow and attract new jobs.

The group is calling for new sources of revenue, largely because the state's fuel excise tax has generated less revenue, in part because more fuel-efficient vehicles are now on the road.

Fuel consumption peaked in 2007 at more than 3 million gallons and has steadily fallen, Move MN said. In its own calculations comparing different proposals, including a wholesale gas tax and a one-time gas tax hike of 10 cents at the pump, Move MN found that a wholesale tax would raise more revenue.

Ricardo Lopez • 651-925-5044