Roads amendment seeks to detour state tax dollars

Published 8:15 am Friday, March 30, 2018

By Brian Bakst

MPR News/90.1 FM

When you rent a car or get a tune-up or buy some new spark plugs, the money you pay in state sales taxes goes into the general treasury. Lawmakers divvy it up when they craft a two-year state budget, just like most other taxes.

Email newsletter signup

But a push is on to dedicate the proceeds instead to new highway lanes, pothole filling and bridge repairs.

Sen. Scott Newman, R-Hutchinson, said the Minnesota Constitution must be amended to tie the sales taxes to transportation needs.

“There isn’t a person in the state of Minnesota that is not benefited by good roads and safe bridges. Everybody has to eat, and everybody has to have clothing. Everybody has to run errands like going to see the doctor,” said Newman, chairman of the Senate’s transportation panel. “And that is only going to happen if we have a good, viable transportation system that supports our economy.”

Newman’s bill cleared the Senate Transportation Committee, which he chairs, on a close vote Wednesday night.

His bill would put the question to voters this fall. It involves the use of hundreds of millions of dollars per year on top of gas tax money which is already dedicated to transportation. And unlike every other piece of legislation, a ballot measure doesn’t need the governor’s signature.

So Republicans, who control both chambers, are in the driver’s seat.

But that doesn’t mean they’re traveling together on this one. While the debate has begun in the Senate, a bill has yet to emerge in the House.

“I am currently personally on the fence,” said Rep. Paul Torkelson, R-Hanska, who chairs the House Transportation Committee.

He’s not yet sold on the Senate’s proposal, which would earmark all kinds of auto-related sales tax — from leases to repairs. Torkelson wants it limited to repair parts.

“It just seems like the most appropriate path forward, and path that’s least likely to raise opposition,” he said.

There are differing ideas about how fast the dedication would happen — whether it’s mostly at once or phased in over time. And, as important, is where the money winds up — with townships, cities and counties all grabbing for what’s left after the state highway system gobbles up the biggest slice.

Joshua Houdek, a program manager at the Sierra Club, criticized the exclusion of transit funding in the distribution plan. The Senate plan props up greater Minnesota transit programs but has nothing for the metropolitan area.

“How a family member gets to work in Granite Falls or Waseca can be very different than how someone commutes in Minneapolis or St. Paul,” Houdek said.

Some of those considerations are secondary to the core debate over the proposal. It would give transportation a clear leg up over other funding priorities before legislators.

Louise Duffee, a board member with the Service Employees International Union, said it could end up shortchanging education, health care and other pressing funding requests when lawmakers set future state budgets.

“I cannot imagine anything more frustrating than coming to the Capitol and having every legislator tell you they want to fund your priority but then be told they cannot because the money is locked away,” Duffee said.

Her union is on the opposite side as labor unions for engineers and road crews.

Jason George represents the Operating Engineers Local 49.

“The Legislature won’t be able to raid this fund as they do often when we do statutory dedication,” George said.

Supporters point out it’s less than 1 percent of the state budget. And they note that transportation often gets left with the budget scraps.

But Sen. Matt Little, DFL-Lakeville, said the amendment creates as many problems as it tries to solve.

“The problem is underfunding,” Little said. “We should be looking at ways to increase revenue for transportation funding. We shouldn’t be pitting students against roads. And we shouldn’t be pitting health care against the trades. That is how the problem has been laid out, but that is not the underlying problem.”

Coming up with new money for road construction is a perpetual challenge. Lawmakers have balked at increasing the gas tax.

The set-aside in the proposed amendment provides the equivalent of a nine-cent-per-gallon gas tax increase, said Abbey Bryduck, who lobbies for the Associated General Contractors.