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Vehicle registration fees would rise under road plan
by Tom Scheck, Minnesota Public Radio
April 1, 2003

A bipartisan group of state lawmakers has thrown its support behind a plan to raise vehicle license tab fees. They say the money would fund much-needed improvements to the state's road, bridge and transit system. The lawmakers, with the backing of the Minnesota Chamber of Commerce, say the state needs to improve the state's transportation system. The tab fee proposal came as the Senate Transportation Policy and Budget Committee defeated part of Gov. Tim Pawlenty's transportation package because they say it doesn't go far enough.

St. Paul, Minn. — House Transportation Policy Chair Ron Erhardt, R-Edina, says lawmakers will need to consider revenue increases to the state's motor vehicle registration fee if they want to make improvements to the state's transportation system. Erhardt is co-author of a bill that would inject $2.5 billion into roads, bridges and transit over the next seven years.

The bill would temporarily increase license tab fees to pay for the project. Tab fees were reduced three years ago when then Governor Ventura made it one of his top priorities.

"If we want to get adequate and safe highways, get rid of our congestion, build roads in rural Minnesota ... and do our the transit needs of metro, we're going to have to find new revenues," Erhardt said.

Transportation packages have created divisions in the House Republican caucus over the years. Last year, the caucus was split over a gas tax increase. This year is no different. Several members, along with Gov. Pawlenty, have pledged not to raise taxes. They say increasing tab fees is a tax increase.

One supporter of the bipartisan transportation package back-tracked as a coauthor. House Transportation Finance Bill Kuisle, R-Rochester, says he doesn't support an increase to license tab fees.

"It's one of the things that we're going to have a hearing on along with the governor's proposal," Kuisle said. "The House caucus is behind the governor's proposal but there's all kind of other ideas that should be heard and that's the way we should be proceeding." Kuisle says the House Republican transportation package will be similar to Pawlenty's proposal. The governor wants to borrow $500 million and get a $500 million advance from the federal government to pay for transportation projects. The plan doesn't raise the gas tax or tab fees.

Senate DFLers, however, don't think the package goes far enough. The Senate Transportation Policy and Budget Committee defeated a key part of Pawlenty's proposal on a 9-6 vote.

Committee Chairman Dean Johnson, DFL-Willmar, says Pawlenty is sending a mixed message to the Legislature and the public by proposing a budget that has fee increases in areas other than transportation.

"He did also propose 458 million dollars in fee increases which is still the public's money but he said that's not a tax increase," Johnson said. "And in his budget, potentially there could a 20 to 30 percent increase in property taxes but and he says that's not a tax increase. So I'm starting to drag Webster's around to understand the definition of fee increases, tax increases and see how all this fits."

Several Senate Republicans criticized the committee for voting against the plan. They say any major transportation package that includes a tax increase will be vetoed by Pawlenty. They say Pawlenty's proposal is their best option this year.

Pawlenty's communications director Dan Wolter says the governor is disappointed that his bill was defeated. He says it's a good plan in light of the state's financial problems: "The governor would be the first to admit that his plan doesn't address the long term funding issue but is a good way to address the short term needs that we have. Which is to get some of these major projects that haven't been funded in recent years onto the planning table and in motion."

The House Transportation Finance Committee will hold hearings on Pawlenty's transportation package Wednesday.

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