The House Transportation Finance Committee passed a comprehensive funding package during a Thursday hearing, but the fate of that proposal remains very much in doubt. The bill, brought by committee chair Rep. Frank Hornstein, DFL-Minneapolis, would generate about $750 million in new dedicated revenue, a sum derived from a sales tax on gasoline at the wholesale level and a sales tax increase in the seven-county metro area.
The merits of the bill were debated during a lengthy committee hearing on Wednesday, and, following the introduction of a number of amendments, passed on a 9-6 party line vote midday Thursday. The value of that vote was called into question almost immediately. House Speaker Paul Thissen released a statement indicating that he would not support the passage of legislation that did not have the support of the business community — namely, the Minnesota Chamber of Commerce — and at least some Republican votes; to date, Hornstein’s proposal has neither.
“Without the support of the business community and Republicans,” Thissen said, “a comprehensive transportation package will not progress any further this session.”
The House leader went on to thank Hornstein and the organizers of MoveMN, a broad coalition of transportation, labor, and community organizations that has sought to rally support for new revenues. Hornstein’s bill was partly based on a framework that MoveMN issued in February.
Supporters of a funding package say Thissen’s announcement does little to change the picture that existed prior to the session. The arduous quest to pass a new funding plan dates back to the beginning of the 2013 session, when repeated attempts were made to craft a bill that could gain favor in both chambers and with Gov. Mark Dayton. Darin Broton, a director at the Tunheim public affairs firm who is managing the MoveMN campaign, said Thissen had made clear in past statements his position about a bipartisan, business-approved bill, and that the governor has drawn “similar lines in the sand.”
Broton points out that several regional chambers of commerce have voiced their support, including chapters in Mankato, Marshall and New Ulm, and said more than half of the members of the Rochester Area Chamber of Commerce are on board with increased transportation revenue. The chief opponent remains the Minnesota Chamber of Commerce, whose transportation policy director, Bentley Graves, reiterated that organization’s distaste for raising new taxes this year in testimony Thursday.
Instead, Graves said, the business group’s members are looking for more effective ways to monitor efficiency in how the Minnesota Department of Transportation (MnDOT) allots spending on maintenance and new projects. After the hearing, Graves said that the Minnesota Chamber of Commerce had held productive meetings with Transportation Commissioner Charlie Zelle on that topic over the past several months.
“There’s still some room to go on the idea of not just becoming more efficient, but being able to quantify that work,” he said.
The Minnesota Chamber of Commerce is not prepared to support new funding without accountability measures in place, said Graves, who explained that Rep. Mike Beard, R-Shakopee, has entered legislation to that effect. Beard’s bill, which would task the Office of the Legislative Auditor with a review of both MnDOT and the Metropolitan Council, has yet to receive a committee hearing. Aside from those concerns, Graves said, business leaders are still operating under the strain of new taxes passed during the 2013 session by the DFL majorities.
Beard has also pushed for a smaller alternative plan that would sink $300 million of the projected $1.2 billion state budget surplus into the trunk highway fund, where it could be used for road and bridge upkeep projects. That plan would exclude any new money for the Metropolitan Council, which Beard has accused of operating “expensive, deficit-ridden transit systems that serve less than 4 percent of the population.”
The state Chamber would be open to the use of surplus cash for new transportation spending this year, according to Graves, who said the business group would consider different possibilities for the surplus — but only after a repeal of all three business-to-business taxes had been assured.
Under Hornstein’s bill, transportation-dedicated sales taxes in the metro area would rise to 1 percent. In five of the counties, that would represent an increase of 0.75 percent. Scott and Carver counties have opted not to implement any optional transportation tax, but would be brought in line with the other five counties under Hornstein’s bill. Rep. Mary Liz Holberg, R-Lakeville, criticized this element of the bill on Thursday, saying Hornstein had taken a “heavy-handed” approach to local governments.
“To shove Scott and Carver County into this process, and impose this tax above the objection of the local government… in my mind is very counterproductive,” Holberg said.
Broton said MoveMN would continue to work with Republican legislators in an attempt to attract a few bipartisan votes. He acknowledged that election year politics are a “fairly strong undercurrent” in the negotiations, but said he has reminded lawmakers that 2008, the last year in which transportation taxes were raised, was also an election year.
Among the nine affirmative votes on Thursday was Rep. Alice Hausman, DFL-St. Paul, who said she supported the bill despite what she saw as an “inequity” spawned by the bill’s use of metro taxes to fund metro projects even as metro taxpayers continue to contribute tax dollars to roads and bridges in Greater Minnesota. As chair of the House Capital Investment Committee, Hausman planned to release a bonding bill proposal later on Thursday, and said her initial salvo would include about $180 million for transportation and related projects. Dayton’s bonding bill, as released in January, had about $80 million for roads, bridges and redevelopment at the TCAAP site in Arden Hills.
Senate Transportation Finance Committee chair Sen. Scott Dibble, DFL-Minneapolis, was unsurprised by the downbeat assessment from Thissen, and said it would not deter his own pursuit of a comprehensive bill. Dibble plans to give his bill a first hearing as soon as next Wednesday, though he said he might wait until after the second policy committee deadline.
Dibble is confident that he has the votes to pass a “strong transportation bill” in the Senate, and said his focus remains on passing a tax increase rather than the use of “one-time” surplus funds. Transportation projects were allotted $50 million in the budget targets released by House DFL leaders on March 14, but Dibble said there is no comparable plan in the Senate.
“One-time money is one-time money,” Dibble said. “The need, as articulated, is great, and it’s multi-year.”