Feb. 19--A large coalition of transportation proponents wants the Minnesota Legislature to levy a new 5-percent sales tax on motor fuels to pay for road and bridge improvements and a 3/4-cent metro sales tax increase to expand mass transit.
The new taxes, plus a smaller tax shift, would raise an estimated $727 million a year to meet the state's growing transportation needs, leaders of Move MN, an alliance of more than 150 organizations, told a joint hearing of the state House and Senate transportation committees on Tuesday.
"We need greater investment in transportation across the state to generate economic growth, to more conveniently move goods, services and people to their destinations, to provide equitable access to good jobs in our state and equitable access to housing and education and for a very strong quality of life that we all enjoy," said Barb Thoman, executive director of Transit for Livable Communities.
The group's proposal is the first comprehensive funding package on the table this year at a time when there's widespread agreement at the Capitol that the state's road, bridge and transit needs are outstripping its current ability to pay for them.
State Transportation Commissioner Charlie Zelle told the lawmakers earlier there's a $12 billion gap between the how much the state needs to spend on roads and bridges over the next 20 years and its projected revenue.
Despite the apparent need, Move MN's proposal faces an uphill climb at the Capitol. So far, neither Gov. Mark Dayton nor legislative leaders have called for transportation tax increases, and they are likely to be reluctant to support one in an election year for both the governor and the House of Representatives.
House Transportation Finance Committee Chair Frank Hornstein, DFL-Minneapolis, said he and Senate Transportation Committee Chair Scott Dibble, DFL-Minneapolis, plan to introduce their own funding bill shortly after the Legislature reconvenes next Tuesday. Dayton has said he supports spending more on transportation, but it might take until 2015 to develop a comprehensive funding package.
Move MN proposed collecting the 5-percent fuel tax at the wholesale level so it would generate more money for roads and bridges as the price of gas increases.
"You would have a system that would keep up with inflation," said Margaret Donahoe, executive director of the Minnesota Transportation Alliance.
The new charge would be in addition to the state's 28.5 cents-per-gallon gas tax and would raise an estimated $360 million a year.
If the wholesale price of gas is $3 a gallon, the proposed new tax would cost motorists an extra 15 cents per gallon, noted Sen. David Osmek, R-Mound.
The proposed 3/4-cent sales tax increase for bus and rail transit in the seven-country metro area would boost the tax rate to 8.5 percent and raise an estimated $335 million a year. Move MN asserted the additional revenue is needed to make Twin Cities transit competitive with metropolitan areas such as Denver, Dallas, Atlanta and Seattle.
Last year, Dayton proposed and the DFL-controlled Senate passed a bill that would have imposed an extra half-cent sales tax for transit in the metro area, but it failed in the House.
Move MN also proposed dedicating all the revenue generated by a sales tax on leased vehicles to highway and transit funding. Currently, a portion of that tax goes into the state's general fund. That tax shift would provide about $32 million a year for transportation projects without a tax increase.
In addition, the coalition recommended that $16 million of the state's federal transportation funding be set aside for bike and pedestrian sidewalks and trails.
Bill Salisbury can be reached at 651-228-5538. Follow him at twitter.com/bsalisbury and facebook.com/PioneerPressPolitics.
Copyright 2014 - Pioneer Press, St. Paul, Minn.