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Counties push increase in gas tax
by Michael Khoo, Minnesota Public Radio
December 14, 2004

County officials say Minnesota's roads and bridges remain chronically underfunded, leading to congestion, delays, and extra costs for commuters and businesses across the state. (MPR file photo)

A stream of recent studies has indicated a need for drastic new investments in the state's transportation infrastructure. A new proposal by the Association of Minnesota Counties outlines a menu of mostly tax and fee increases to infuse an extra $1 billion a year into roads and transit. The centerpiece is a 10-cent-a-gallon gas tax increase, a move Gov. Tim Pawlenty has repeatedly ruled out. Yet the tide may be turning; even Pawlenty's Republican allies are warming to the idea.

St. Paul, Minn. — Minnesota's 20-cents-a-gallon gas tax hasn't been increased since 1988, and that's led to an awful lot of pent up demand for transportation improvements, according to the Association of Minnesota Counties.

Dennis Fink, a St. Louis County commissioner and president of the association, says it's time to hike the tax by a dime a gallon over the next two years and then allow the tax to grow with inflation.

	'Hike the tax'

"It is a proposal endorsed by county officials in the large counties as well as the small counties. And let me tell you, that was no small accomplishment," he said.

Fink and others say Minnesota's roads and bridges remain chronically underfunded, leading to congestion, delays, and extra costs for commuters and businesses across the state. Fink says the gas tax is really a user fee; the more you drive, the more you pay.

But Gov. Pawlenty says that logic won't sway him from his no-new-tax pledge.

"It's quite clear that the gas tax is referenced in law as a tax and has been viewed as a tax based on that definition. So, I don't think we can just change the rhetoric and then somehow change positions on that basis," he said.

Pawlenty has said if lawmakers want to raise the gas tax, they'll have to put the issue directly to Minnesota voters in the form of a constitutional amendment. And the governor notes that he's infused hundreds of millions of dollars into road and bridge projects in recent years.

Those proposals have essentially been one-time injections of cash, and transportation advocates say the system needs an ongoing, dedicated source of new funding. For that reason, support for a gas tax increase seems to be growing outside the governor's office. Rep. Michael Beard, R-Shakopee has agreed to sponsor the association's package.

Beard says that, with the nearly even divide between Republicans and DFLers in both houses of the Legislature, it may be easier to find a bipartisan compromise that might buck the governor's objections.

"If we could put together a coalition and make it veto-proof, well, that would send a clear message to the governor. Now, I like the governor. He's on my Christmas card list, and I'm on his. I'd hate to just go do that to him if he would take it personally. But I think we can get beyond the personality business and say this is the business of the state. You do what you have to do; we'll do what we have to do," he said.

The Republican speaker of the House has previously favored a gas tax increase, although 10 cents a gallon indexed to inflation may be more than he's willing to accept.

	Gas-tax player

Lakeville Republican Mary Liz Holberg says she, too, is willing to re-examine the issue. Holberg has opposed gas tax increases in the past, but as the new chair of the House Transportation Finance Committee, she says she's not ready to rule out a modest increase.

"I think that we've gotten to the point where we've got to get serious about this. And it may just mean raising taxes in order to accomplish it," she said.

The association plan also includes an increase in vehicle license tab fees, and it gives local governments the authority to boost the sales tax by a half-cent for transportation and transit projects. Add in some additional borrowing and expected increases in federal assistance, and the proposal tops out at just over a billion dollars in new transportation spending each year.

"To use a broad spectrum of funding sources is the fairest way imaginable," says DFLer Steve Murphy, who chairs the Senate Transportation Committee, and will sponsor the plan in the Senate. "Is this going to be the cure-all of cure-alls? No. And we all realize that. But is it a good place to jump off the diving board from? Yes."

The governor's office isn't ready to weigh in on most of the plan's specifics, other than to reiterate Pawlenty's well-documented opposition to new taxes. An administration spokesman says the governor will outline his own vision for transportation spending later this month.

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