Legislators pore over budget, transportation options with proposed surplus

Published 3:40 pm Sunday, March 8, 2015

Graphic by Eric Johnson/eric.johnson@austindailyherald.com

Graphic by Eric Johnson/eric.johnson@austindailyherald.com

Forecasting a budget battle

Story by Trey Mewes, Sarah Stultz and Associated Press

The 2015 Minnesota Legislature is two months into its latest session and faces enormous financial decisions moving forward. Perhaps the biggest question on everyone’s mind is what lawmakers will do with a $1.9 billion budget surplus.

Some lawmakers propose using part of that surplus to give tax breaks to Minnesotans. Others think putting money toward transportation issues would be best. Local legislators believe the answer will be a little more complicated.



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“We’ll start to prioritize what to do with that money,” Sen. Dan Sparks, DFL-Austin, said.

Much of the proposed $1.87 billion surplus is already in specific funds and programs based on the state’s existing funding mechanisms, so it’s not as though lawmakers have an almost $2 billion pot of money to work with. Still, it’s far more likely the surplus will go to a variety of initiatives rather than just one or two larger issues.

“I always look at it as the people’s money, not the state’s money,” said Rep. Peggy Bennett, R-Albert Lea. “I want to make sure we take good care of it.”

Bennett said she thinks some of the surplus should go back to people in the form of tax relief, and then the state needs to look at its long-term priorities such roads, bridges and education.

Building better bridges

One of the most prominent calls among Republican lawmakers is to use part of the surplus to help fund the state’s ailing transportation infrastructure.

Yet Democrats say using surplus money won’t address the state’s longterm infrastructure needs.



“The problem is, we have an ongoing need in transportation, a sustaining issue that can’t be fixed with a one-time infusion of cash,” Rep. Jeanne Poppe, DFL-Austin, said.

To Poppe and Sparks, the state’s burgeoning transportation issues need to be addressed with sustainable funding sources.

Gov. Mark Dayton has recently proposed a new gas tax of at least 16 cents per gallon and higher vehicle registration fees to dedicate billions of dollars more for long-term transportation spending. It mirrors a Senate DFL plan.

Dayton also released a list of more than 600 transportation projects needed throughout the state to improve roads and bridges.

Both Sparks and Poppe have previously expressed concerns about a gas tax, but it remains to be seen whether local legislators will support a transportation package that includes a gas tax.

“Being a border community, we have to be aware of other states are doing,” Sparks said.

Poppe doesn’t believe a gas tax will gain much traction in either the House of Representatives or the Senate if the state’s business communities aren’t behind the measure. The Minnesota Chamber of Commerce has publicly opposed a gas tax, and Poppe doesn’t know how far the proposed tax would get if it doesn’t have support from business proponents.

“I think there needs to be just a discussion about how do you make transportation independent of everything else,” Poppe said. “We have the gas tax, we have federal highway dollars, we have other dollars that are kind of dedicated funding, but we’re not seeing enough money from those sources.”



Bennett said she doesn’t know how the state could consider taxing more, especially after seeing the projected surplus.

“There are ways we can find a consistent money flow without taxing,” she said.

She noted she has only received a couple emails in support of a gas wholesale tax.

She said she thinks the state needs to look at how its present transportation dollars are being spent and whether they are going toward actual roads or bridges or whether they’re being spent on beautification projects.

“Those are all good things, but they’re not a priority,” Bennett said of the beautification projects.

She said the Republican caucus is putting together a long-term plan to address transportation.

Gov. Mark Dayton ramped up pressure Thursday on majority House Republicans to produce a viable alternative to his multi-billion dollar proposal for roadwork and mass-transit projects, which is stuck in neutral at the Capitol.

Dayton joined Democratic Senate Majority Leader Tom Bakk in questioning the GOP’s commitment to tackling the transportation-funding issue this year as the session nears its midpoint. Dayton said the options raised by his adversaries so far amount to “a slice of the surplus and a double-dose of make-believe.”

“I urge the House to step up. They’re co-governing with us and they need to take on that responsibility,” Dayton said. “Quit whacking the pinata of my proposal and come forward with your own.”

Republican House Speaker Kurt Daudt said his caucus won’t raise the gas tax, especially in light of a $1.87 billion budget surplus. He said the GOP would release a comprehensive proposal soon, but have already given indications that they’ll carve off part of the surplus to provide a quick dose of road money.

“It’s disappointing that Democrat leaders have doubled down on their unpopular plan to raise the gas tax and take more money out of the pockets of hardworking Minnesotans,” Daudt said in a written statement.

House Transportation Finance Committee Chairman Tim Kelly said the GOP plan could also seek to earmark taxes already assessed on auto parts and rental cars for transportation purposes.

“When you start adding all those up, there will be no good argument for raising taxes,” Kelly said.

Such set-asides wouldn’t be binding on future legislators unless written into the constitution by voter referendum.

House Minority Leader Paul Thissen said his chamber’s Democrats will put up at least 31 votes for a transportation plan that includes a long-term funding component and possibly new taxes, which would take 68 to pass. But, he said, “It’s now incumbent on Republicans to put out a plan that actually solves the problem, something they haven’t done yet.”

Bakk said Senate Democrats oppose using money from the general treasury for transportation because it would compete against education, nursing homes and other spending priorities. In rough times, he said transportation money could be the first thing cut, causing a greater backlog in road-and-bridge work. The gas tax is constitutionally dedicated to highway construction.

“Going down the road and trying to commit general fund money when we happen to have a little bit around is not a transportation plan,” Bakk said. “It’s just kicking the can down the road.”