The Peppin Report (April 10, 2015)

Dear Neighbor,

Inside this edition of the Peppin Report:

1. I-94 West Chamber of Commerce Event

2. Transportation Column

1) I-94 West Chamber of Commerce Event

On Thursday, April 9, I attend the I-94 West Chamber of Commerce Community and Business Excellence Awards. Congratulations are in order for:

King Solutions for winning the Large Business Excellence Award

Jet Edge, Inc. for winning the Manufacturing Business Excellence Award

Hamel Rodeo for winning the Non-Profit Business Excellence Award

Albertville’s Country Inn & Suites for winning the Small/Medium Business Excellence Award

Lori Johnson from the City of Otsego for winning the Excellence in Local Government Award

Paul Ederer for winning the Chuck Christian Lifetime Excellence Award

Kriss Mills of Cabela’s for winning the President’s Award for Excellence in Community Service

In addition, Dan Dixon, President and CEO of Guardian Angels, shared a heartwarming and inspirational story about his mission trips to Tanzania building an elder care home.

Thank you to all the hardworking people of local businesses who do so much to improve our community!

2) Transportation Column

Making needed improvements to our road and bridge infrastructure is a much-discussed topic at the Capitol. Recently I submitted a column to our papers outlining my view on the transportation priorities for our community and our state, and how those needs can best be funded. The column is reprinted below in its entirety.

Rep. Peppin: My view on transportation funding

As I drive to work every morning, I’m regularly reminded of the need to improve our road and bridge infrastructure. With the harsh winters and weather-related traffic delays we frequently experience in Minnesota, driving to a destination is already a difficult endeavor. At the Capitol, there is certainly a consensus on the need to repair and replace our worn roads and bridges.

Over the past several years we have made significant strides toward making necessary transportation upgrades in the northwest suburbs. For example, the Corridors of Commerce program is helping fund the expansion of I-94 between Rogers and St. Michael as well as completing the last leg of the Highway 610 expansion from County Road 81 to I-94 in Maple Grove. Additionally, the persistence and hard work of Maple Grove staff and the city council has resulted in construction of a new third lane on I-494 between Highway 55 and the Fish Lake interchange – set to begin this spring. I’ve also introduced legislation that provides funding to construct a full access point and auxiliary lanes on Interstate Highway 94 just east of the existing Highway 101 overpass. This is among the longest stretches of freeway without an exit in the entire metro area. This proposal will make significant progress toward alleviating traffic congestion in our community.

Republicans and Democrats both agree that more needs to be done to enhance our roads and improve the condition of our bridges. The focus of having a safer and more efficient transportation system isn’t simply a desire, but a constitutional duty. The founders of our state saw fit to add an entire article – Article 14 – to our state’s constitution authorizing state government to construct, improve and maintain public highways as well as provide aid to local units of government to fund transportation initiatives.

While the problem has been acknowledged by those on both sides of the political aisle, not everyone sees eye-to-eye on the right solution. For instance, Governor Dayton wants to impose a 6.5% wholesale tax on gross receipts of gasoline to fund his $11 billion transportation plan. According to the Star Tribune, this would mean drivers would have to pay an additional 16 cents per gallon if gas prices were in the $2.50 per gallon range. The Dayton $0.16 per gallon gas tax would go up an additional dime to $0.26 per gallon if gas prices increase to the $4.00 per gallon range.

Recently, we learned that our state will have a $1.869 billion surplus for the upcoming biennium. According to the Office of Minnesota Management and Budget, the surplus is in large part due to the fact that cheaper oil reduces capital expenditures in oil-related industries and allows consumers to deliver spending toward non-gasoline purchases.

The size of the surplus lends credibility to the argument that the 2013 tax increases championed by Governor Dayton and passed by a Democrat-majority legislature were not necessary. And at a time when Minnesota families are seeing some relief at the pump with lower gas prices, the need for a large $0.16-$0.26 per gallon increase in the gas tax as proposed by Governor Dayton will be a heavy and unnecessary strain on family budgets.

Not only is this proposal problematic for Minnesota families, but the governor has also put forward a half-cent tax increase in the seven-county metro transit sales tax to fund $2.8B in transit projects over the next ten years. In other words, this new tax will go toward funding light rail, commuter rail, and bike paths that serve a very small percentage of the population.

Republicans in the legislature have offered a very different proposal to fund our long-term transportation needs. The Republican plan invests $7 billion more over the next decade without imposing a new tax increase on hardworking Minnesotans. The ten-year approach prioritizes road and bridge infrastructure through immediate repair of roads in Minnesota communities, making improvements to highways for commuters and commerce, and providing reliable, long-term funding without raising taxes.

This proposal – called the Road and Bridge Act of 2015 – creates a special fund called the Transportation Stability Fund that collects existing proceeds from dedicated tax revenues and deposits them into accounts for each of their dedicated purpose. There are five accounts that would dedicate a combined $3.078 billion over ten years:

1. Road and Bridge Account – revenue from existing sales tax on auto parts
2. Metro Capital Improvements Account – revenue from existing sales tax on rental vehicles
3. Small Cities Account – revenue from existing rental vehicle tax
4. Greater Minnesota Bus Services Account – revenue from 50% of existing Motor Vehicle Lease sales tax
5. Suburban County Highway Account – revenue from 50% of existing Motor Vehicle Lease sales tax

In addition to the dedicated funds provided by the Transportation Stability Fund, the Road and Bridge Act of 2015 uses $1.3 billion in Trunk Highway bonds, $1.2 billion from realigning Minnesota Department of Transportation resources, $1.05 billion in General Obligation bonds, and $228 million in General Funds from available money for the current fiscal year.

While some in St. Paul have expressed concerns about using general fund money for transportation needs, 33 states fund transportation through general fund money (the general fund is a state’s “checkbook” used to fund key priorities) as a means to supplement the funding of roads and bridges because they believe it’s a priority and core function of government. Minnesota is not among that group of 33. Instead, Minnesota uses three sources to finance roads and bridges – the gas tax, vehicle registration (license tab) fees, and the sales tax that comes from motor vehicle sales.

The Republican bill also requires the Minnesota Department of Transportation (MNDOT) to find and implement 15% in internal savings. This could create up to $65 million which could be reinvested into roads and bridges. Some criticize this directive as being an unreasonable mandate on MNDOT. However, the third lane expansion of I-494 in Maple Grove set to begin this spring was financed from internal savings and savings realized from the lower cost of the new Stillwater bridge. Clearly, more can be done.

We should also consider additional bonding – using the state’s credit card – to build and maintain roads and bridges. Given the fact that our transportation system is a state asset that will be used by future generations, bonding is a sensible and affordable way to finance needed improvements.

As a legislator, I take my job seriously to be a good steward of taxpayer dollars. With a limited amount of resources, we need to make smart choices with the dollars Minnesotans send to St. Paul. While some projects may sound attractive to fund, we truly have to examine our needs. Hundreds of millions of dollars have been spent over the years on light rail lines and bike paths – both nice to have – but not the highest priority for people in the northwest suburbs.

The people I am proud to serve in St. Paul don’t ask for much from state government. They work hard and they pay their taxes all while raising a family. What they do ask for, however, is to prioritize their tax dollars on the basics such as roads and bridges so that they can get to work and drop their kids off at school in a safe and timely manner. That is a fair request of state government, which is why transportation funding will continue to be a major priority of mine over the next two years.

As always, please don’t hesitate to contact me as the legislative session moves forward. My direct line is 651-296-7806. My email address is rep.joyce.peppin@house.mn and my mailing address is Room 459 State Office Building, 100 Dr. Martin Luther King Boulevard, St. Paul, MN 55155

Have a wonderful weekend,

Joyce

**Encourage your neighbors and friends to sign up for my email updates at www.house.mn/34A