Legislators in a race to keep up with transportation needs

Second Avenue in downtown Minneapolis.
Minnesota legislators face demand for fixes to congestion and decline in revenue from gasoline tax.
MPR Photo/Dan Olson

Matt Dawson's mind is made up. With the exception of using one of those one-hour rental car services a couple times a week, Dawson has dropped out of the car culture.

Dawson, a 28-year-old Minneapolis resident, relies on public buses for most of his commuting to and from his various theater jobs, and he's all in favor of more transit.

"I just love the light rail and I wish we could get some more, get it a little bit extended," he says.

Matt Dawson is part of Minnesota's transportation solution -- and he's part of the problem. He's ditched his car for transit, lessening by one the glut of single-occupant vehicles in Twin Cities rush-hour congestion.

But by no longer buying gasoline for his 12-year-old Chevy, Dawson is no longer a contributor through the state gasoline tax to the state highway trust fund. That's the big pot of money that pays for a good share of road and bridge building in Minnesota.

And here's the irony.

In 2005, for the first time in nearly 25 years, Minnesota's gas tax revenue declined -- mainly because of more fuel-efficient cars. That's the pot of money that pays for road and bridge construction.

Unlike Matt Dawson, most Minnesotans are driving more, not less. So, one would expect gas tax revenues to be higher. But the vehicles are slightly more fuel efficient, and a small but increasing number of them burn fuels that aren't taxed or are taxed at a lower rate.

The result is that in 2005, for the first time in nearly a quarter of a century, Minnesota's gasoline tax revenue declined. Lawmakers can no longer count on year after year of stellar increases in gas tax revenue.

Some say the solution is to raise more money with a higher gas tax and registration or tab fees. A nickel more on the gas tax would raise about $160 million. A 1 percent tab fee increase would raise about $5 million.

Minnesota House Transportation Finance Committee Chairman Bernie Lieder, DFL-Crookston, says wait a minute.

"I definitely don't want to jump into it and say we're going to raise this tax or any other tax until you get a feel for what's going on here," he says.

"Here" is the state Capitol.

Rep. Lieder personally favors raising the gas tax and tab fees. However one estimate puts the state short more than $1 billion a year in money for meeting transportation needs.

Senate Transportation Committee chairman Steve Murphy, DFL-Red Wing, is urging people to lower their expectations for how much money can be raised.

"Even with the best bill that we can get through the Legislature, we're not going to come close to meeting those expectations," Murphy says.

Murphy and Lieder say they want to see what consensus they can build among lawmakers. Consensus will help avoid the legislative gridlock that has plagued transportation funding packages in prior sessions.

Consensus might also mean having enough votes to override a veto by Gov. Pawlenty, who has said he will not approve a transportation funding bill with a gas tax increase.

The Minnesota Chamber of Commerce is among the most ardent and powerful voices urging action on transportation funding. Chamber President David Olson says proposals to raise lots of money risk driving away supporters.

"The bigger it (the transportation bill) gets, support falls off and nothing happens. That's why we think we need to continue to chip away on this issue," Olson says.

If lawmakers worry about taxpayer reaction to higher gas taxes and tab fees, they're also hearing from their constituents about property tax increases.

Property taxes are rising at double-digit rates in many locales.

One of the reasons is local officials' increasing reliance on property tax revenue for transportation, according to Minnesota Transportation Alliance lobbyist Margaret Donahue.

"When state revenues like the gas tax and license tab fees, and even the motor vehicle sales tax don't keep up, then local governments really have no choice but to look to local property taxes to fix their local roads," Donahue says.

As for additional transit funding, some Twin Cities area lawmakers and county officials favor a metro-wide sales tax dedicated to transportation, including transit. But again, agreement is elusive.

The Minnesota Chamber of Commerce opposes the idea. The Minnesota Transportation Alliance has favored it in the past. The Minnesota Center for Environmental Advocacy likes the idea.

The MCEA describes the Twin Cities as "transit starved." MCEA attorney Jim Erkel says a sales tax trumps other ideas for addressing the issue.

"Looking around, it's the one thing that has a broad enough base. It spreads out the joy or the pain, depending on your point of view, and it can raise the kind of money that is required to fully implement a well-planned transit system," Erkel says.

Polls don't supply much insight on how Minnesota taxpayers feel about transportation funding. Transportation advocates are cheered by the 57 percent of Minnesota voters who approved spending all, not just half, of the vehicle sales tax revenue on transportation. But that's not a new tax. And it's not reliable evidence in the minds of some lawmakers that Minnesotans are ready to dig deeper to pay for transportation.

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