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Minnesota Legislature

Transportation division green-lights omnibus bill with gas tax, sales tax hikes

Rep. Frank Hornstein, chair of the House Transportation Finance and Policy Division, comments on a series of amendments to the division’s omnibus bill during the April 4 meeting. Photo by Paul Battaglia

The House’s omnibus transportation finance bill — legislation that would inject billions of new dollars into the state’s roads, bridges and transit, and includes a hike in the state’s gas tax — passed its first test Thursday.

HF1555, sponsored by Rep. Frank Hornstein (DFL-Mpls), would spend more than $7.2 billion over the 2020-21 biennium on Minnesota’s creaky transportation infrastructure, and include new dedicated funding for roads, bridges and expanded mass transit service.

The House Transportation Finance and Policy Division approved the bill, as amended, on an 11-5, party-line vote and referred it to the House Ways and Means Committee. It is scheduled to be heard there April 10.

DFLers and Republicans in the Legislature have long agreed additional funding is needed to meet the needs of the state’s roads and bridges. But those on differing sides of the aisle have disagreed on how.

The omnibus bill, unveiled Tuesday, proposes to raise Minnesota’s per-gallon gas tax by 5 cents per year over four years, and then automatically with the rate of inflation in years after that. That, DFL leaders say, would raise nearly $600 million in funding for the state’s road and bridge infrastructure in the 2020-21 biennium, and more than $1 billion in 2022-23.

Audience members collect copies of amendments to the House Transportation Finance and Policy Division’s omnibus bill before the April 4 meeting. Photo by Paul Battaglia

It would also take Minnesota’s current 28.5-cent gas tax from middle-of-the-pack to among the highest in the nation.

An increase in some tab fees — and bringing the motor vehicle sales tax in line with other sales taxes —would also fund additional spending. Older vehicles would see a decrease in tab fees, under the bill.

Gov. Tim Walz and legislative DFLers have justified their proposed tax and fee increases by pointing to the poor — and worsening — state of the state’s roadways.

Minnesota’s roads are in “state of disrepair,” Hornstein said. “It is literally crumbling infrastructure.”

And to address the problem, he added, “We are going to need new revenue.”

For transit, HF1555 proposes to raise a seven-county metro area sales tax by a half-cent to raise roughly $400 million over the next biennium.

Half of that funding, under the bill, would be directed to the Metropolitan Council for transit service. The other half would go to the Transportation Advisory Board, an advisory panel to the council responsible for planning new regional transit projects.

“Overall, this is a very expensive bill,” said Rep. John Koznick (R-Lakeville). “We’re looking at $1.3 billion in tax increases.”

Republicans have supported transportation funding plans that use existing General Fund dollars by shifting revenue from motor vehicle-related taxes. DFLers have said that funding source isn’t constitutionally-dedicated to transportation — like proceeds from the gas tax is to roads and bridges — and could be shifted to other needs in any given year by a future Legislature.

But, Rep. Paul Torkelson (R-Hanska), the Republican lead on the division, said, “It doesn’t say in the constitution that we should only use dedicated funding.” He called it a mistake to not utilize General Fund dollars, and said the gas tax isn’t a long-term solution to the state’s transportation funding gap.

 

Amendments adopted

The division added a number of amendments offered by both DFLers and Republicans to the bill during hours of deliberation Thursday. Among amendments adopted are those that would:

  • clarify which agricultural commodities qualify under an existing annual permit to allow a vehicle or combination of vehicles with a total of six axles to haul certain farm products;
  • require MnDOT to maintain inventory of transportation assets related to bridges, pavement, geotechnical, pedestrians, bicycles and transit for the purposes of asset management;
  • direct Metro Transit to operate lowest-emission buses in service areas deemed to have poor air quality;
  • regulate the testing of automated vehicles in the state;
  • direct MnDOT to install directional signs on Interstate 35 directing motorists to the campuses of the Minnesota State Academy for the Deaf and the Minnesota State Academy for the Blind;
  • require drivers traveling in the right-hand lane of traffic to yield the right-of-way to any school bus attempting to enter that lane from a shoulder, right-turn lane or other location from where the school bus had stopped to load or unload passengers; and
  • free the city of Floodwood from operating and maintaining a former train depot that is to be remodeled into a safety information center and rest area at the intersections of Trunk Highways 2 and 73.

 


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