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Capitol View®
Tim Pugmire

Coalition unveils transportation tax plan

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Transportation advocates are proposing a new 5 percent sales tax on wholesale fuel as a way to pay for improvements to roads, bridges and transit.

A coalition of groups known as Move MN unveiled its transportation finance proposal today during a joint hearing of the House and Senate transportation committees. The sales tax would generate an estimated $360 million annually. Margaret Donahoe of the Minnesota Transportation Alliance told lawmakers that the proposed tax would come on top of the existing gas tax.

“We think this is a way to make that revenue source much more sustainable in the future,” Donahoe said. “This is what a number of states including  Pennsylvania, Virginia, a number of states have moved to this kind of a system, recognizing the value of having something that tracks with the price of fuel versus consumption.”

The coalition also wants a three quarters of a cent increase to an existing  metro area sales tax to fund bike and pedestrian connections to transit. Another proposal would take the money already being collected from a vehicle lease tax and dedicate it to transportation spending.

DFL House and Senate leaders have said the passage of a transportation-related tax increase is unlikely this year.

Following the three hour hearing, Sen. David Osmek , R-Mound, said he doesn’t like the proposal. Osmek also said he doesn’t believe it will go anywhere this session.

“What we’re doing here is doing everything to avoid a gas tax,” Osmek said. “Why? Because we know it’s an election year. We also know that the governor, in an election year, is not going to raise the gas tax. So we’re coming up with creative ways to avoid the words gas tax.”

The Democratic chairs of the House and Senate transportation committees said they’re preparing a funding proposal similar to the Move MN proposal.  Rep. Frank Hornstein, DFL-Minneapolis, said coalition provided an important outlined with some good concepts.

“These are important ideas,” Horstein said. “We’re going to take a look at them we’re going to talk to our committees and come up with a bill.”

Hornstein added that he’s still in discussions with DFL leaders about the prospects of moving the bill forward this year.