Transportation taxes, spending a focus at Capitol

Published 7:14 pm Tuesday, April 2, 2019

ST. PAUL — Democrats who control the Minnesota House unveiled a transportation budget Tuesday that expands on Gov. Tim Walz’s spending and taxing proposals, while a Republican-controlled Senate committee, in a largely symbolic move, voted down his transportation tax increase plans.

Both moves helped stake out positions for what are expected to be difficult negotiations late in the legislative session on a final transportation package that will pay for roads, bridges and public transit statewide.

Leaders of the Senate’s GOP narrow majority have been adamant that there’s no need to raise taxes when the state projects a $1 billion surplus for the upcoming two-year budget period. But Democrats, including the governor, argue that tax increases are necessary to ensure a stable, dedicated revenue source for transportation in a growing state while freeing up general fund money for education and other programs.

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The House Democratic majority’s proposal largely mirrors Walz’s, although it would phase in a 20 cent gas tax increase over four years instead of the governor’s proposal for two years. Both versions would then index the gas tax for inflation. There are some differences on proposed license tab fee increases; the House version would actually lower tab fees for older cars, and House Democrats proposed a half-cent sales tax increase for the Twin Cities metro area to fund mass transit projects instead of the one-eighth-cent increase that Walz proposed.

“We are joining Governor Walz in offering Minnesotans a choice between crumbling roads, bridges that are structurally deficient and a mass transit system that falls further and further behind our competitors in other parts of the country, and a choice between potholes and pavement,” Majority Leader Ryan Winkler said at a news conference.

The leaders were backed up by a contingent of orange-clad members of the Laborers’ International Union of North America.

“They know this bill is one of the most important jobs bills of this session and they know that it will create good and sustainable jobs now and well into the future,” said Rep. Frank Hornstein, chairman of the House transportation committee.

The Senate transportation committee later voted largely along party lines, 9-6, against a bill that took the unusual step of breaking out Walz’s transportation tax proposals and omitting his spending proposals for roads, bridges and transit.

The committee chairman, Sen. Scott Newman, said he’ll propose a broad transportation budget bill next week, but he wanted his committee to first have a discussion about the governor’s tax proposals — and not just the gas tax.

Newman cited Walz’s proposals for higher registration and tab fees, raising the sales tax on motor vehicles from 6.5 percent to 6.875 percent, and reversing a 2017 tax law change that channels part of the sales tax on motor vehicle parts into roads instead of the state’s general fund so that it could be spent on education or other things. Newman and other Republicans want to reserve the parts tax money for transportation.

Senate Majority Leader Paul Gazelka said Newman has shown that he’s able to work with the governor on issues where they have common ground, such as finding money to fix the state’s troubled vehicle registration system known as MNLARS.

“I do believe he wants to work with the governor on what we do on transportation, but not how we fund transportation,” Gazelka said.