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House, Senate negotiators tackle transportation bills in hopes of finding a deal

By Jonathan Avise
The omnibus transportation conference committee meets for the first time April 19 to do a walk-through of the House and Senate proposals and review tracking sheets. Photo by Andrew VonBank

Can Minnesota lawmakers reach a long-discussed, long-term transportation funding deal? House and Senate negotiators began their work Wednesday on trying to strike a transportation funding agreement they hope a skeptical Gov. Mark Dayton will sign into law.

Sponsored by Rep. Paul Torkelson (R-Hanska) and Sen. Scott Newman (R-Hutchinson), HF861*/ SF1060, the respective omnibus transportation finance bills would fund transportation operations, maintenance and agencies for the next two years.

Lawmakers have been unable to pass a comprehensive transportation bill in recent years that would provide what state transportation officials say is a badly needed increase in road and bridge dollars with disagreement centering on how to provide that funding.

Both the House and Senate versions propose to shift auto-related sales tax revenues on transportation-related items from the General Fund to boost spending on the state’s roads and bridges. They would also rely on borrowing to fund transportation projects across the state over the next two years.

Here are some key things to know about each bill:

General Fund shift

The House proposal would divert $450 million in sales tax revenues generated by things like auto parts, rental cars and motor vehicle lease sales taxes from the General Fund over two years into a new fund to fund road and bridge construction.

The Senate plan proposes to shift slightly less, about $400 million over the 2018-19 biennium, into a similar fund.

 

Bonding

HF861 calls for utilizing roughly $1.3 billion in bonding proceeds over the next two years for state road construction and the Corridors of Commerce program that aims to help stretches of highway critical to the Greater Minnesota economy.

A much more modest $325.3 million in borrowing over two years is proposed in the Senate plan. Much of that — $200 million — would go toward Corridors of Commerce. The rest would be earmarked for three specific projects: U.S. Highway 12, state Highway 14 and state Highway 212.

 

Transit funding

While both the House and Senate versions propose to place limits on future funding of Metro Transit light-rail projects in policy sections of the respective legislation, the House bill would go much further in the next two years. It would cut base funding to the Metropolitan Council for Metro Transit service and end the state’s contributions to Metro Transit’s operations and maintenance budget, cuts that would add up to more than $100 million over the biennium.

Council officials say those reductions would devastate core transit service in Minneapolis, St. Paul and some suburbs by causing huge cuts in bus service across the region.

 

Policy differences

Included in the House proposal are a number of measures aimed at severely curbing future metro area light-rail planning and projects.

 Proposed transit and regional governance policy measures in the House bill include:

  • a directive to the Metropolitan Council to set an objective of 40 percent farebox recovery — the amount of operating costs recovered by paid fares — by 2022;
  • requiring legislative approval before a regional rail authority, county or city in the Twin Cities metropolitan area, or the Metropolitan Council, can spend funds on the study, project development or construction related to any light-rail transit project; and
  • prohibiting the Metropolitan Council from using certificates of participation or other debt obligations that are backed by motor vehicle sales tax revenues. The Metropolitan Council, Counties Transit Improvement Board and Hennepin County Regional Rail Authority used a similar financing maneuver last year after state funding for the Southwest LRT project fell through. 

The Senate version would only place a limit on the state’s share of LRT operating costs to lines as they exist now, meaning any new or extended light-rail lines would not be eligible for state funding without a specific appropriation.

 

What’s next?

The conference committee is scheduled to take public testimony during an afternoon hearing on Thursday.

Dayton has proposed a far more sweeping transportation plan that would increase the state’s motor vehicle gas tax and hike license tab fees. On the transit side, his plan would increase a metro area transit-dedicated sales tax to fund the expansion of Metro Transit’s bus and rail service. 

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