Dear Friends and Neighbors,
The 2015 legislative session has begun with agreement by the House, Senate and Governor’s Office that Minnesota needs to invest in our roads and bridges. I heard somewhere that 97 percent of those who commute to work use cars as their primary mode of transportation.
Many people have asked me the question, “So, where does money come from to pay for road and bridge repair?”
For Minnesota taxpayers, transportation funding comes in the form of three main taxes: a motor fuels tax imposed on a per-gallon rate, a motor vehicle registration tax also known as tab fees and a motor vehicle sales tax which is a 6.5 percent tax applied to car sales.
In 2013, state and federal highway funding came to $2.64 billion. Funding sources include $721.2 million from the federal government, $860 million from the motor fuels tax, $622.6 million from tab fees, and $358.7 million from the motor vehicle sales tax.
What’s also important to note is 40 percent of the motor vehicle sales tax is diverted from road and bridge repair to transit (per a 2006 constitutional amendment). If all of that money, instead of just 60 percent was dedicated to highways, an additional $300 million would be available to repair our roads—a significant investment.
House Republicans introduced an initial transportation plan last week, a proposal that won’t raise taxes on Minnesota families but will spend a significant amount of money to repair our roads. House File 4 includes over $750 million in new transportation funding for roads and bridges over the next four years.
The plan includes requiring the Minnesota Department of Transportation (MnDOT) to find and implement 15 percent savings for FY2014-15. Doing so could add another $65 million to transportation spending. Additionally, it also requires MnDOT to dedicate 90 percent of the unreserved balance in the Trunk Highway Fund to roads and bridges for FY2016-2019. Finally, it uses a portion ($200 million) of the $1 billion projected budget surplus for local road and bridge construction, maintenance and pothole repair.
Competing plans, by Senate Democrats and Governor Dayton collect additional revenue through tax increases on middle and low income Minnesota families.
Idea 1: There’s a proposal for an additional 6.5 gasoline tax at the wholesale level, placed on top of the 28.5 cent per gallon gas tax already placed on Minnesotans. This would be a hugely regressive new tax. Besides being just a really bad idea, Democrats are pushing for a new tax like this because a portion of this new tax could be diverted to transit instead of roads.
Idea 2: In addition to the new wholesale gas tax, Democrats have also proposed:
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Increasing vehicle registration fees
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Increasing the metro area sales tax to pay for road repair
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Like Republicans, they have also suggested MnDOT find savings through efficiencies
Senate Democrats estimate their proposals would raise almost $800 million in new revenue in 2016.
With a bipartisan legislature and a DFL governor, we will have to work together to find compromise on these issues this year and pass a transportation package that properly funds our roads and bridges.
When comparing the initial plans, what is perplexing is that after raising billions in new taxes last biennium and facing a $1 billion surplus, the first answer for many politicians across the aisle is to go back to you for yet another tax increase.
Instead we should refocus our dollars on our highways by using existing revenues to fund our priorities. Because Minnesota’s general fund budget has increased from $34 billion to $42 Billion over the past 4 years (an increase of over 20 percent), this should not be a terribly difficult thing to do.
I would also like your opinion.
Would you oppose or support a change in state law which, if approved, would require 100% of the motor vehicle sales tax to be used for roads and bridges. Existing law mandates that no more than 60% of the motor vehicle sales tax can be used for road and bridges and no less than 40% can be used for transit.
1) I Oppose a change in the law...existing law should stay which allows no more than 60% of the motor vehicle sales tax to be used for roads and bridge repair and at least 40% be used for transit.
2) I Support a change in the law...100% of the proceeds from the motor vehicle sales tax should be used for road and bridge repair and 0% should be used for transit.
3) I support a change in the law. 80% of the proceeds from the motor vehicle sales tax should be used for road and bridge repair and 20% should be used for transit.
Send your answer by replying to this email. I value your input!
Many thanks go out to you for the honor of representing Chisago County in the Minnesota House. It’s a privilege to be your state representative.
Sincerely,
Bob