Gov. Mark Dayton, Speaker Kurt Daudt renew call for transportation funding

DFL Gov. Mark Dayton and GOP House Speaker Kurt Daudt softened their tone Friday and sounded hopeful about a transportation package they say is needed to fix crumbling roads and bridges.

But disagreements about where to find the money and mass transit — especially the proposed Southwest Light Rail Transit — lurked just below the surface, complicating any path to a deal.

The division comes as lawmakers race in the legislative session's three remaining weeks to complete unfinished work from 2015 on transportation and taxes, while also taking up a bonding package on infrastructure projects that will stretch to hundreds of millions of dollars.

The House GOP and Dayton and his allies in the DFL-controlled Senate are skirmishing about how to spend the state's $900 million projected budget surplus, with Dayton and the Senate pushing for new spending on education and other priorities, while Republicans want to split the money between transportation and tax cuts.

Flanked by Lt. Gov. Tina Smith, who has traveled extensively this year to sell the administration's transportation plan, Dayton on Friday called for new annual spending of $600 million for roads and bridges and $280 million for transit. "These additional expenditures are absolutely essential to continuing our state's economic growth and social vitality," he said.

The centerpiece of Dayton's 2015 transportation plan was an increase in the state gasoline tax to pay nearly $11 billion during the next 10 years on road and bridge infrastructure and transit improvements. The governor scaled back the amount and said he is open to other revenue ideas failing a gas tax.

Daudt also said Friday he wants a major package of road and bridge money. But that is where the agreement ends.

The Republican plan, which passed the House last year, shifts revenue from the sales tax on auto parts and some other car-related sources from the general fund and dedicates the money to roads and bridges. Daudt has also pledged to use some of the state's $900 million surplus on roads, as well as some bonding money.

Dayton has in the past conceded that the gas tax is a political non-starter and said Friday he was open to exploring other options.

But he again registered opposition to taking money from the general fund, as the Republican plan would require. "That's $500 million out of the general fund. We'd have to look at the consequences of that," said Dayton, referring to the effect on education and other programs.

Infrastructure experts say a dedicated source of revenue is important to the financial viability of large transportation projects.

Daudt recently told a group of Republican activists that taking money out of the general fund for transportation was a side benefit of the GOP proposal because it would begin to "starve out" the general fund. He later said that his position has always been that there is enough money in state coffers to fund transportation infrastructure without new taxes.

But complicating matters further, a group of seven DFL senators from the metro region, led by Sen. Ron Latz, DFL-St. Louis Park, sent a letter to Sen. LeRoy Stumpf, the chairman of the Senate bonding committee. They threatened to withhold their support of a bonding bill — legislation that requires a supermajority to pass — if leaders don't approve $135 million in state funding for the Southwest Light Rail Transit project.

Daudt said there aren't the votes in the House GOP caucus to support the light-rail project.