It takes a coalition to raise the state gas tax, insiders argue
To nudge a gas tax hike or other transportation tax increases through the legislature is going to take a coalition, Capitol insiders believe.
And some question whether such a coalition currently exists.
But recent transportation finance reports have raised hope among funding advocates.
“I think we see this year as different,” said Executive Director Margaret Donahoe of the Minnesota Transportation Alliance, a century-old group of business, labor, and government transportation advocates.
Donahoe points to the creation of a state transportation finance advisory group by Democratic Gov. Mark Dayton, which recently released a report suggesting vehicle tab fees, the gas tax, and other transportation taxes be considered for increases, as evidence that transportation is important to Dayton.
Beyond this, Donahoe cites a recent report by the Itasca Project, a business CEO-driven group, which claims that speedily completing the regional transit system at a cost of $5 billion could produce direct benefits ranging from $11 billion to $16 billion over 20 years.
“All of these things are sort of coming together,” Donahoe said.
Minnesota Trucking Association President John Hausladen said association board members support a “reasonable increase” in the state fuel tax if the increase provides tangible benefits to the trucking industry.
The association board, Hausladen said, has not determined the exact amount of the increase it might support.
Members are not eager to be first in line when it comes to absorbing new taxes, Hausladen explained.
But they know funding discussions will be taking place this coming session.
“We want to be part of that,” Hausladen said.
The association, with some 720 members, “strongly” opposes the use of toll roads or a mileage tax in raising transportation revenues.
In polling conducted within the association, the Interstate system in Minnesota was considered adequate.
But close to a third of the members responding to the poll deemed county and city roads below average. Hausladen said.
The Minnesota Chamber of Commerce, which like the Trucking Association has supported gas tax increases in the past, is not supporting taxes now.
“The Chamber’s current fiscal policy supports revenue neutrality,” Kate Johansen, health and transportation policy manager for the chamber, said in an email.
“Within that principle, the Chamber’s transportation position has been to maximize existing state resources to give Minnesotans the greatest value for their transportation dollars,” she said.
The chamber supports innovative public-private partnerships, she noted.
It will continue to focus on “increased value” as an important tool in improving infrastructure this session, Johansen said.
Rep. Jim Abeler, R-Anoka, one of the “Override Six” of State Capitol lore Republicans who broke ranks to vote to override Republican Gov. Tim Pawlenty’s veto of a transportation finance bill four years ago – senses the fervor of those days is lacking.
“They’d have to do a lot of selling on it,” Abeler said of getting transportation tax increases through the legislature.
“The momentum is not there yet,” he said.
Hennepin County Board Chairman Mike Opat said it’s not enough that transportation advocates rally around proposed transportation tax increases. Other groups, outside of the advocacy circle, need to back them, too.
The Hennepin County Board, other than an “enduring” desire to see Southwest LRT and the Bottineau Transitway funded, has not taken a stance on transportation tax increases, Opat said.
Personally, Opat indicated support for a gas tax increase.
“I think long term, the gas tax is too low in Minnesota,” he said.
That opinion is not shared by Anoka County Commissioner Andy Westerberg who views state government facing a spending problem, not a revenue, problem.
Roads projects are expensive, he noted.
For instance, correcting the intersection of Armstrong Boulevard and Highway 10 — a stretch of highway through the City of Ramsey slowed by traffic lights – to freeway status could cost $30 million and up, Westerberg said.
State leaders have been coy in discussing transportation tax increases.
Dayton has been more direct, coming out against a gas tax increase and citing the findings of the transportation finance advisory group as evidence of a growing problem.
“I think they (the task force) laid it out,” Dayton said.
“If we continue where we are now — that level of effort — we’re going to have continued deterioration, more congestion, longer drive times, worse roads. And that’s not a pleasant prospect,” Dayton said.
“But no one can say now that we’re not forewarned,” he said.
Senate Majority Leader-designate Tom Bakk, DFL-Cook, when asked about lawmakers passing additional transportation funding beyond bonding, indicated things were up in the air.
“I don’t have a clue at this point,” he said.
“I know there are a lot of unmet needs in our transportation infrastructure,” Bakk said.
House Speaker-designate Paul Thissen, DFL-Minneapolis, agreed.
“We didn’t get into this situation in being behind on transportation funding in a year or two years or even a decade,” Thissen said.
“It’s been a long time coming. And it’s not going to be fixed in a year or two years,” he said.
The Minnesota Department of Transportation (MnDOT) has identified billions in unmet transportation need over upcoming decades.
Bakk counselled all funding advocates to show restraint.
House Transportation Policy Committee Chairman Ron Erhardt, DFL-Edina, indicated there was no doubt in his mind transportation needs more money.
“No, there’s not,” he said.
Erhardt, one of the Override Six who later changed political parties, spoke of funding Southwest Light Rail to leverage federal dollars.
With more fuel efficient vehicles, gas tax revenues, if not flat, are faltering, he noted.
But replacing the gas tax with a mileage tax, for instance, is likely years away, Erhardt said.
The gas tax has a long history in transportation funding.
In the 1920s, a 2 cent per gallon gas tax was established in Minnesota to help pay for the growing road system, a state revenue history noted.
Currently, the state gas tax is about 28 cents a gallon — the federal gas tax 18 cents a gallon and it hasn’t been raised in almost 20 years.
In 2011, state fuel taxes raised about $849 million.
Every penny the gas tax is increased yields an additional $31 million a year.
The Tax Foundation ranks the state gas tax 19th among the 50 states.
Almost 5 million vehicles were registered in Minnesota last year.
MnDOT oversees about 12,000 miles of state road.
Neighboring Wisconsin has about the same miles of state road, with Iowa and North Dakota, at about 8,900 and 7,300, respectively.
Michigan has about 9,700 miles of state road, with Illinois at 16,000 miles.
Texas boasts the most state road miles in the nation at about 80,000.