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Senate transportation plan calls for higher gas tax
by Michael Khoo, Minnesota Public Radio
April 22, 2003

Senate DFLers today are proposing increasing the state gas tax and license tab fees to funnel additional money into road projects and mass transit. The plan amounts to roughly twice the transportation funding favored by Gov. Tim Pawlenty and House Republicans. It also runs afoul of Pawlenty's pledge not to raise state taxes during his time in office. But supporters say the state's transportation needs demand new revenue, and they say they're hopeful the governor and his GOP allies can be persuaded.

St. Paul, Minn. — The keystone of the Senate Democrats' plan is a direct violation of Gov. Tim Pawlenty's no-new-taxes pledge: raise the state gasoline tax from 20-cents-per-gallon to 25 cents and scale back the license tab fee cuts championed by former governor Jesse Ventura.

But Senate Transportation Finance Chair Dean Johnson, DFL-Willmar, says the state has underfunded transportation needs for years, and he says the solution requires new revenue.

"The day of judgement is here for transportation. How many times are we going to talk about need for better roads and transit? And at some point in time we're going to have to make a financial investment," Johnson said.

The plan would pump an additional $2.1 billion in new money into the transportation budget. Roughly two-thirds would flow to road and bridge projects. The remaining third would be earmarked for mass transit.

But the Pawlenty administration is standing firm. Spokesman Dan Wolter says Pawlenty has already made it clear where he stands on the issue.

"They don't recognize the reality that we're operating in. Minnesotans don't want higher taxes. And the governor's committed to balancing the budget without doing it. He's put forward a very aggressive road package to find $1 billion of additional funding for road projects without raising taxes. And we think it can be done that way," Wolter said.

Pawlenty has proposed borrowing $500 million for road projects. The debt would be repaid through administrative savings at the state Transportation Department. He would also seek an advance on federal funds, bringing the total package to roughly $1 billion -- about half the Senate proposal.

House Republicans have embraced the Pawlenty approach. Transportation Finance Chair Bill Kuisle, R-Rochester, that he's standing by the no-tax plan, although he says the debate isn't over yet.

"I sure hope that we can come to some kind of agreement. And that's why I'm not drawing a line in the sand saying, 'No.' You have to be able to negotiate. I'm hoping we can do it without a tax increase," Kuisle said.

Transportation advocates say the Senate plan is more forward-thinking. Fred Corrigan, the executive vice president for the Minnesota Transportation Alliance, has given Pawlenty credit for proposing his bonding package. But Corrigan says it doesn't really provide any new funds for tranportation in the long run. He says the Senate plan, by contrast, recognizes the need for stable funding.

"We now have some long-term problems given the growth of congestion in the metro area and just growth in population in the state during that period. So we have some large capital investments facing us. We have large transit service requirements that we didn't have 14 years ago. And we believe that it will take additional revenues to get those things done," Corrigan said.

Corrigan says he's hopeful that Pawlenty and House Republicans will soften their position at least on the increase in license tab fees. But Pawlenty has previously equated the tab fees with a tax.

The Senate DFL plan also provides significantly more for transit projects. The Pawlenty proposal offers modest roadway improvements that could be used by buses -- shoulder lanes, for example, or park-and-ride lots.

The Senate plan, by contrast, offers almost $175 million over the next two years for public transit.

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