Earlier this week, the Minnesota Senate passed a sweeping transportation funding bill that is controversial among Republicans because it includes a new gas tax.
Sen. John Pederson, R-St. Cloud, had this to say about the proposal:
“If this bill passes this afternoon, we’re going to have the third highest gas tax in the country and we’re going to have the highest gas tax in the Midwest.”
The new gas tax isn’t law yet, and given how far apart the Senate transportation bill and the House transportation bill, which doesn’t include the gas tax increase, are, it’s not clear that the proposal will survive long enough to make it to Gov. Mark Dayton’s desk.
But the basics of Pederson’s claim are correct.
At the pump, people are paying 28.5 cents per gallon of gas in taxes (it’s 28.6 if you include a .1 cent inspection fee), and that money is collected for road and bridge construction.
Dayton and other Democrats have said that the current tax isn’t keeping up with projected transportation costs. So, they want an additional gas sales tax at the wholesale level to pay for an additional $6 billion in road and bridge construction over the next 10 years.
The DFL-backed transportation plan includes a minimum 16 cent gas tax increase. That means people would pay a total of 44.5 cents in gas taxes if it were adopted. The number could go up if the wholesale price of gas goes up, but it would only be adjusted annually.
How would Minnesota stack up to the rest of the nation if the new gas tax is put into law?
According to a February 2015 analysis by the non-partisan Tax Policy Institute in Washington, D.C., it would actually be second in the nation to Pennsylvania, which has a gas tax of 50.5 cents per gallon.
As for how Minnesota would fare in the Midwest, Pederson is also correct. Minnesota would surpass Wisconsin, which among Midwestern states currently has the highest excise tax in the Midwest at 30.9 cents per gallon (32.9 if you include a petroleum inspection fee).
Pederson’s comment makes it seem that the new gas tax proposal is already on the books, and it’s not.
But by and large, he’s right about how Minnesota would stack up against other states if the gas tax were increased.