Gas tax hike proposal resurfaces in Minnesota Legislature

Despite opposition from the governor, the idea of raising gasoline taxes to finance highway improvements is still alive at the Legislature.

Sen. Scott Dibble, DFL-Minneapolis, chair of a Senate transportation committee, has revived a gas tax hike that seemed dead only a couple of weeks ago.

Dibble on Tuesday proposed increasing the tax by 7.5 cents a gallon as part of a funding package that would also increase the Twin Cities metro sales tax for transit.

A spokeswoman for Gov. Mark Dayton said Tuesday that he "does not support an increase in the gas tax at this point." Dayton does favor increasing the metro sales tax for transit.

But Dibble said legislative votes are lacking to raise only the sales tax for metro transit and not increase revenue for state highways. He said the state general fund could be tapped to finance transit without an increase in the metro sales tax.

"It's a balanced package that treats all parts of the state with some level of equity," Dibble said of his latest proposal.

Earlier, he favored imposing a wholesale fuels tax on oil companies, but dropped the proposal amid concerns that the firms would merely pass the increase on to motorists at the pump.

In addition to raising the tax on ordinary gasoline by 7.5 cents, he would increase taxes on E85 by 5.3 cents.

The proposal is scheduled to be heard Wednesday in the Senate Taxes Committee as an alternative to a House transportation finance bill that lacks increases to the gas tax or the metro transit sales tax.

"A status quo bill doesn't have majority support, at least from members of my caucus," Dibble said.

Rep. Frank Hornstein, DFL-Minneapolis, chairman of a House transportation committee, dropped plans for similar tax hikes after Dayton renewed his opposition earlier this year.

In rejecting the Dibble proposal, Dayton spokeswoman Katharine Tinucci said, "The governor is still committed to working with the Legislature to define and deliver a vision for a statewide transportation system that will serve the needs of Minnesotans for decades to come."

Dayton said in December, "I don't support a gas tax increase at this time, because I think there's not public support for it."