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Transportation cash: Wait till next year

Mike Mullen//May 21, 2014

Transportation cash: Wait till next year

Mike Mullen//May 21, 2014

Transportation Commissioner Charlie Zelle supports the business community’s desire to see efficient spending. But, he argues, the state’s needs cannot be addressed entirely by finding potential savings. (File photo)
Transportation Commissioner Charlie Zelle supports the business community’s desire to see efficient spending. But, he argues, the state’s needs cannot be addressed entirely by finding potential savings. (File photo)

Democratic leaders highlighted a number of legislative successes during the course of a wide-ranging press conference Tuesday morning. During the media event, Gov. Mark Dayton and top officials from both chambers drew attention to the passage of a number of major spending and policy bills during the course of the past two sessions.

For obvious reasons, the list of Capitol triumphs made no mention of one issue that is widely acknowledged as a major need for the state. In each of the two legislative years under DFL control, a comprehensive transportation funding package has emerged, lurched forward and ultimately stalled. The inability to craft a deal that has buy-in from the administration, legislators spanning the rural/urban divide, and the business lobby is concerning, but perhaps not surprising, according to Rep. Frank Hornstein, DFL-Minneapolis.

Hornstein, chair of the House Transportation Finance Committee, pointed to one “important development” in 2014 — the passage of a financing plan out of that panel, which he said would serve as a lead-in to revisit the topic at the onset of the 2015 session.

“It was very important to set the table for the future in that way,” Hornstein said. He continued: “Not everybody was ready to vote for it. We’ve funded a lot of good projects. Transportation is one more out there that still needs to happen.”

MoveMN push fell short

The eventual quiet death of Hornstein’s bill was a disappointment for MoveMN, the broad coalition of labor and advocacy groups formed in 2013 to push a transportation package.

Darin Broton, a public affairs director with the Tunheim firm who is managing the MoveMN effort, said that coalition had come into this session “very realistically,” and knew any tax increase would be a difficult outcome to realize, particularly within the confines of an abbreviated session.

“Lawmakers wanted to get out as quickly as possible,” Broton said. “So the idea of raising three quarters of a billion dollars in the course of this session was going to be a tough haul.”

Under the terms of Hornstein’s bill, which was modeled on a proposal put forth by MoveMN, the state would implement a tax on gas purchases at the wholesale level. This new levy, when combined with an increase in the metro area sales tax to fund transit projects, would have generated an estimated $750 million in annual tax proceeds.

But the initiative seemed doomed from the outset, given the unwavering opposition of the Minnesota Chamber of Commerce. Chamber lobbyist Bentley Graves repeatedly testified that the business outfit would not support any new revenue streams without evidence that the state was making progress on cost-saving “efficiencies.” Those efforts had been a condition for the Minnesota Chamber of Commerce’s support of the gas tax increase passed in 2008.

To that end, Graves was pleased with the late-April announcement from Transportation Commissioner Charlie Zelle, who said the state had identified some $50 million in savings on construction projects, and planned to rededicate those funds toward other needs; the newly freed money was to be evenly divided between ongoing projects on I-494 and I-90.

Likewise, legislators this year inscribed in law a goal of finding further efficiencies of roughly $50 million during fiscal year 2015. Graves said those efficiencies are “a first, and, in some sense, a modest first step.” The $50 million savings achieved this year, and aimed for the next, are about 5 percent of the state’s total transportation budget — or roughly one-third of the 15 percent efficiency goal sought by the Chamber of Commerce.

Broton said MoveMN would spend the interim between this session and the next taking its case to the public, attempting to reach potential voters at county fairs and street festivals. The coalition would also look to bring on regional chambers of commerce, as well as individual businesses, to help make the case that some members of the private sector are already on board for raising taxes to support new projects.

For her part, House Majority Leader Erin Murphy said she deems the support of organizations like the Minnesota Chamber of Commerce and the Minnesota Business Partnership “critical” to passing a funding overhaul.

Transportation Commissioner Charlie Zelle is supportive of the business community’s desire to see efficient spending, and, as a former board member at the state Chamber of Commerce, understands that group’s way of thinking. But, he argued, the state’s needs cannot be even remotely addressed entirely by locating potential savings.

“Maybe 15 percent [of the budget] can be covered through finding efficiencies,” Zelle said. “But 85 percent cannot.”

$50M in supplemental spending

This year, legislators settled on a modest amount of one-time transportation funding out of the state’s surplus, approving about $50 million in new appropriations through the supplemental budget bill. The bulk of that money is destined for road repair and maintenance related to weather damage, with an additional $6.5 million dedicated toward transit projects in Greater Minnesota.

Rep. Michael Beard, R-Shakopee, who served as GOP lead on the House Transportation Finance Committee, said he would have supported directing much more of the surplus toward funding for roads and bridges. Beard said he managed to win over his caucus, despite its initial push to “give back” the surplus.

“Giving it back, that’s a nice political deal,” Beard said. “But if we agree there is a need to get on the roads and bridges and highway system… rather than raising our taxes, why don’t we make that investment? And [House Republicans] came around to my way of thinking.”

Beard, who is not running for re-election, anticipated that legislators from both parties would eventually agree to a gas-tax increase, noting that consumers tend not to notice the new toll, which is constitutionally bound to pay for the roads those drivers are already using. Beard, along with other Republicans, has continually made the case that money is better spent on roads and bridges upkeep rather than metro-area transit projects, which he said are better characterized as attempts at “urban revitalization.”

Both Zelle and MoveMN’s Broton sounded optimistic notes about striking an overarching deal in the near future. Broton pointed out that Dayton, in his recent State of the State address, had called transportation funding “among the 2015 legislative session’s top priorities.”

Zelle said he is “heartened” by the emergence of a political advocacy movement like MoveMN, and added that he did not expect to see a quick solution for such a complex problem.

“This,” Zelle said, “is a long-term funding challenge, and it takes multiple years to set a foundation and establish a common set of facts.”

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