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Capitol View®
Tim Pugmire

DFL lawmakers push railroad tax

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HornsteinMarquart
Reps. Frank Hornstein, left, and Paul Marquart outlined their proposals for improving railroad safety in Minnesota. Tim Pugmire|MPR News

DFL lawmakers are calling for new taxes on railroads to pay for safety improvements along the tracks traveled by oil trains.

Under one of the bills unveiled today, the state would assess large railroads up to $32.5 million a year for grade crossing safety improvements.

Rep. Frank Hornstein, DFL-Minneapolis, said oil train derailments and explosions have become an “all too frequent occurrence” across the country. Hornsten said the railroads should pay their fair share to keep Minnesota communities safe.

“We have a special responsibility on this issue in Minnesota, because we’re at the crossroads of oil transportation by rail in North America, given our proximity to both Bakken and the oil fields of Canada,” Hornstein said.

Another bill, based on Gov. Mark Dayton’s proposal, would expand railroads’ property tax liability. It would generate more than $20 million a year for the state and $40 million for local governments.

Rep. Paul Marquart, DFL-Dilworth, said railroads have a responsibility to create safe conditions for cities.

“Do we want to make sure that all of our communities are safer and better prepared when you have oil trains coming through them, or are you worried about the railroad companies paying a little but more to take care of this burden?” Marquart asked. “I think that’s a no brainer.”

Hornstein has some Republican co-authors for his assessment bill. But GOP leaders, as well as the railroads, strongly oppose the proposed property tax increase. House Taxes Committee  Chair Greg Davids, R-Preston, has called it a nonstarter.

Railroad officials have also said the tax proposal appears to violate a federal law that precludes different treatment of railroads. But Rep. Marquart said he believes the proposal is on solid ground.

UPDATE

John Apitz, legislative counsel to the Minnesota Regional Railroads Association, said the proposed tax increases would have a major impact on companies that move goods by rail and on short line railroads.

“Short lines work on extremely small margins,” Apitz said in a written statement. “Tripling their property taxes will hurt these small business and the customers who rely on them.”

Apitz said the proposals also ignore more than $500 million in safety and service improvements that railroads will make in Minnesota this year.