A penny-per-gallon gas tax increase and “driver’s licenses for all” are among provisions of the omnibus transportation finance bill passed 69-62, as amended, by the House during a rare Saturday session.
An extensive package of infrastructure investments, policy changes and some controversial tax increases, HF1684, sponsored by Rep. Frank Hornstein (DFL-Mpls), would fund the Department of Transportation ($6.25 billion), the Department of Public Safety ($490.49 million) and the Metropolitan Council ($178.81 million) during the 2022-23 biennium.
It includes $400 million in trunk highway bonding for fiscal year 2024, of which $225 million would go to state road construction and $175 million to the Corridors of Commerce program.
The bill would result in a $39.6 million increase in General Fund spending over the current base level. It now travels to the Senate where Sen. Scott Newman (R-Hutchinson) is the sponsor.
Hornstein said infrastructure investments are particularly important at a time when Minnesota and the country are faced with a number of simultaneous challenges.
“In this moment, infrastructure is a bridge to a brighter future, it is a bridge to unify our state,” Hornstein said, adding issues such as racial justice and reconciliation, economic development and climate change are addressed in the legislation.
Revenue increases proposed, and opposed
The bill does include several proposals that would raise taxes.
One would direct the Department of Revenue to index the motor fuels tax to inflation using the National Highway Construction Cost Index, a change estimated to add 1.2 cents or 1.3 cents to the cost of a gallon of gas each of the next four years.
“That’s a penny per year, $9 per average motorist, for better roads and bridges, simply to keep up with inflation,” Hornstein said.
A 0.5% increase to the transit sales tax in the Twin Cities metropolitan area – that Hornstein has said would only be levied in some communities – is also proposed, as is one that would dedicate half of the surcharge on electric vehicle purchases to funding electric vehicle charging infrastructure.
There is also a vehicle registration tax depreciation schedule adjustment so that those who purchase more expensive, newer vehicles (no more than 5 years old), will pay more. It would also raise the current tax on motor vehicle sales from 6.5% to 6.875% beginning in 2022.
The bill would create a dedicated revenue source for roads in small cities – the 705 Minnesota communities with populations under 5,000 – by reallocating some of the money raised by the sales tax on auto parts.
Republicans opposed proposals in the bill that would increase taxes and made several attempts to remove them. An amendment offered by Rep. John Petersburg (R-Waseca) would have eliminated the gas tax proposal, while another offered by Rep. Paul Torkelson (R-Hanska) would have deleted the depreciation schedule changes and the motor vehicle sales tax increase. Both were defeated.
“The timing of these fees is remarkable,” Torkelson said. “Raising taxes and fees in Minnesota when we have a $4 billion surplus just doesn’t make sense to me.”
Rep. Nolan West (R-Blaine) offered an amendment that would have prevented the Metropolitan Council from issuing revenue bonds without voter approval, calling it “inappropriate” the council has that power with very little oversight. It failed 68-64.
An amendment from Rep. Brian Johnson (R-Cambridge) and another from Rep. Jon Koznick (R-Lakeville) would have provided “lights on” funding in case of a government shutdown later this year, but Hornstein said the measures were premature and each was defeated.
What’s in the bill?
One of the highest profile policy provisions in the bill would allow people without proof of legal presence in the U.S. to obtain a driver’s license or Minnesota identification card, a controversial change supporters say would allow more Minnesotans to drive legally, buy auto insurance and get to and from work more easily, but opponents say would incentivize more illegal immigration.
Torkelson was able to modify the provision with an amendment that would require “noncompliant” driver’s licenses to have vertical orientation instead of the standard horizontal one, as is now done for people under the age of 21, and making them valid for two years instead of four.
Another amendment that was adopted, offered by Koznick, would require Minnesota Management and Budget to incorporate costs to the state’s General Fund for the Metro Mobility program in its annual financial forecasts. It is hoped this would provide more transparency and better management of the ridesharing program aimed at people with disabilities or other health concerns.
Some of the bill’s highest profile funding proposals include:
Some of the bill’s policy proposals include: