Senate changes gears on transportation funding bill

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A week after the Senate Transportation Committee tabled its budget bill due to lack of support, the committee on Wednesday evening passed a bill that increases funding for highways and transit. The bill passed 11-4 with the support of all DFLers and the committee’s ranking minority member, Sen. John Pederson, R-St. Cloud. Sen. Mary Kiffmeyer, R-Big Lake, wasn’t present for the vote.

House and Senate DFL transportation committee chairmen last week scotched plans to propose increases to transit funding in the Twin Cities and road and bridge funding in greater Minnesota when Gov. Mark Dayton reiterated his opposition to increasing the state’s per gallon gasoline tax.

In the aftermath of the Dayton comments, Senate Transportation Chairman Scott Dibble, DFL-Minneapolis, proposed a so-called lights-on bill that omitted the half-percent sales tax increase in the metro area for transit as well as any gas tax increase that would have been constitutionally dedicated to road and bridge funding. When it became apparent that the bill didn’t have the votes to pass, Dibble tabled it.

The new bill is a second act for increased funding for transportation.

“The committee was not happy with the status quo, lights-on current law,” Dibble said. “That became obvious through the deliberation of that bill. We just had to stop and regroup, retrench and talk. The committee, the caucus and the state really wants to move forward on making these investments. I had to bring back to committee a bill that would pass.”

The $5.8 billion bill, which now awaits a vote in the Senate Finance Committee, seeks to increase funding for roads and bridges by setting a 5.5 percent sales tax on gas at the wholesale level. The bill would also reduce the constitutionally dedicated gas tax by 6 cents. The net result is estimated at an annual $225 million in new revenue. Also in the mix is the half-cent metro counties sales tax increase for transit in the metro area that Dayton has proposed. The wholesale gas tax would pay for the so-called Corridors of Commerce program, which would provide funding to certain projects that involve safety and commercial concerns. The new funding would provide Corridors of Commerce with $158 million for the 2014-2015 biennium.

Pederson said the Corridors of Commerce was a factor in his decision to cross parties to vote for the bill.

“The Corridors of Commerce is something that’s important,” Pederson said. “I live in a district that’s got the most congested freeway in the state of Minnesota and the second [most]. I-94 going to St. Cloud and then Highway 10 going to St. Cloud are number one and number two in the state. It’s a grave situation for our community and greater Minnesota. Those corridors need to be addressed, and this is something that’s going to help get that done.”

The bill also increases the motor vehicle sales tax (MVST) from 6.5 percent to 6.875 percent. Minnesota voters in 2006 voted in favor of dedicating all of the MVST proceeds to transportation with a split of 60 percent for transportation and 40 percent for transit. The MVST increase drew opposition from John Hausladen, the executive director of the Minnesota Trucking Association.

“With a tractor trailer, just the trailer itself has grown from $100,000 to $125,000 since 2007. The vehicles are getting more expensive, [there are] more taxes coming in. So we really question the need increase the tax from 6.5 percent to 6.875 percent,” Hausladen said.

The Senate bill also proposes to allow counties to impose a wheelage tax, a move that drew applause from the Association of Minnesota Counties and the Minnesota Inter-County Association. It allows local governments to enact a local option sales tax for transportation without a public referendum.