House Republicans Lead With Balanced Approach On Roads, Offer Reasonable Budget Targets
ST. PAUL, MN—House Republican leaders announced Tuesday a joint target compromise aimed at bringing the 2016 session to a timely and successful close, as well as a compromise transportation counteroffer that ensures a $6 billion investment in road and bridge funding over the next 10 years.
Following House Republicans' successful defeat of a gas tax increase, Republicans announced agreement on a balanced approach to funding roads and bridges including two DFL proposed funding sources.
"We are encouraged that the governor has listened to Minnesotans and finally taken his gas tax increase off the table," said Speaker Kurt Daudt (R-Crown). "We are prepared to meet the governor in the middle, and agree on a plan that addresses Minnesota's $6 billion need for road and bridge funding over the next decade. We all agree that roads and bridges are priority and let's get it done this session.”
The Republican compromise offer utilizes key components of Governor Dayton's transportation plan, as well as the House Republican plan passed in 2015 that remains in conference committee to increase transportation funding by $600 million annually. One half, or $300 million, comes from the House Republican proposal to use existing funds to pay for road and bridge improvements. The remaining half comes from two sources identified by Governor Dayton; $200 million from trunk highway and general obligation bonds and $100 million from modifications to the depreciation schedule of tab fees. Governor Dayton first proposed using $200 million per year in bonding in 2015, and reiterated his support of using bonding funds in his supplemental budget proposal on March 15, 2016. In both his original proposal and offer this week, Governor Dayton offered changes to tab fees.
In addition, House Republicans announced a joint target compromise with $450 million of the state's $900 million budget surplus toward middle-class tax relief including reducing the state tax on social security income and veterans benefits, a tax credit for contributions to college savings plans and student loan payments, property tax relief for farmers, and a dependent care tax credit supported by Governor Dayton.
"These targets represent a significant compromise on the part of House Republicans, and we hope Governor Dayton and Senate Democrats will continue working with us in good faith to address these and other key priorities as we bring the session to a close," concluded Majority Leader Joyce Peppin (R-Rogers).
Finally, House Republicans joint target compromise includes $20 million in increased debt service payments that would allow for up to $800 million in bonding. This is the average size of the bonding bill in the past 10 even-numbered years and a $200 million increase from House Republicans initial bonding offer. The House Republican bonding proposal will prioritize local road and bridge projects, water infrastructure supported by Governor Dayton, and asset preservation at Minnesota's Higher Education institutions.
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House Republican Majority Joint Target Compromise - May 18, 2016
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Fiscal Year 2017
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Fiscal 2018-19
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Tax Relief
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$450 million
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$500 million
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Roads and Bridges
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$300 million
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$550 million
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Supplemental Budget
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$65 million
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$100 million
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Bonding (debt service)
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$20 million
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$0
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Health Care Access Fund
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$0
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$0
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Bottom Line
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$65 million
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$8 million
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TOTAL
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$900 million
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$1.158 billion
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Middle-Ground Road & Bridge Compromise
