Dayton, Senate leaders still back gas tax increase

Despite a $1.9 billion projected budget surplus, Gov. Mark Dayton and Senate Democrats still plan to push for a gas tax increase to fix the state’s roads and bridges over the next 10 years.

Appearing in public together for the first time since a disagreement last month over commissioner pay raises, the governor and Senate Majority Leader Tom Bakk, DFL-Cook, were united Thursday in calling for new revenue dedicated to transportation and pressing House Republicans to share a “real” plan of their own.

Dayton applauded Senate Democrats for coming up with a long-term funding proposal. When it comes to House Republicans, he said there’s “nothing coming forward but a slice of the surplus and a double-dose of make-believe.”

“I have no desire to raise $6 billion in taxes from anybody if it’s not necessary. But I have even less of a desire to turn my back on the problem,” Dayton said during the joint appearance at the Veterans Service Building near the Capitol in St. Paul.

The governor’s proposal to raise $10.7 billion through a 6.5 percent gross receipts tax on fuel, an increased metro-area sales tax for transit and  raising vehicle registration fees is not far off from a plan introduced by Sen. Scott Dibble, DFL-Minneapolis, to raise nearly $800 million in 2016 for road, bridge and transit projects. With the governor’s office and the Senate leadership now united, the two similar plans, which both rely on a new 6.5 percent gas tax for road and bridge revenue, will be merged.

With a $1.9 billion surplus on the table, Republicans are even less excited about a gas tax increase.

“It’s disappointing that Democrat leaders have doubled down on their unpopular plan to raise the gas tax and take more money out of the pockets of hardworking Minnesotans. … It’s the wrong approach for Minnesota families, especially in light of a nearly $2 billion surplus,” House Speaker Kurt Daudt, R-Crown, said in a statement following the joint press conference Thursday.

Turning to the surplus for transportation could repeat mistakes of the past, Bakk said.

Only a few dozen lawmakers remember what it was like to have a surplus and mismanage it into a deficit, he said. It would be a challenge to educate legislators who weren’t around in the late ’90s about the risks involved when lawmakers cut taxes and increase general fund spending during a surplus environment, Bakk said.

Daudt said House Republicans plan to unveil their own “comprehensive” transportation funding plan in the coming weeks.

Rep. Tim Kelly, R-Red Wing, introduced a transportation bill earlier this session that would raise $750 million without raising taxes. Republicans have called for using general fund dollars and efficiencies at the Minnesota Department of Transportation to cover construction, maintenance and rehabilitation of highways, roads and bridges over the next four years.

But Bakk cautioned against funding transportation with general fund money because it isn’t sustainable in the long-term.

When transportation has to compete with other state priorities like early childhood care, education and social services in the general fund, investments don’t get made, Bakk said.

“Going down the road and trying to commit general fund money when we happen to have a little bit around is not a transportation plan; it’s just kicking the can down the road,” he said.

When the Senate shares its budget targets later this month, it won’t include general fund money for transportation, he said.

MnDOT Commissioner Charlie Zelle said a 10-year funding plan gives the department more certainty when planning projects so dollars can be used more efficiently.

“Without knowing whether the dedicated funding is coming, we’re unable to make the kind of thoughtful and essential project determinations,” Zelle said.

In February, Dayton released a list of 600 unscheduled road and bridge projects throughout the state that would only be completed if the state raises new transportation revenue. Dayton, Zelle, Lt. Gov. Tina Smith and others have been touring project locations throughout the state to drum up support for the plan.