GOP transportation plan: $7B, 10 years, no tax hike
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Updated 2:20 p.m. | Posted 10:44 a.m.
Minnesota House Republicans have unveiled a transportation funding proposal that they say would spend $7 billion over 10 years on roads and bridges without raising taxes.
The approach contrasts sharply with DFL Gov. Mark Dayton and Senate Democrats, who are pushing plans that rely on a gas tax and metro sales tax increases and also include funding for metro area transit projects.
During a news conference Monday, House Transportation Chair Tim Kelly, R-Red Wing, said the Republican plan uses $228 million of surplus money, $1 billion in general obligation bonding over 10 years, another $1 billion in transportation bonds and existing sales tax revenue from auto parts, car rentals and leases.
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He said the sales tax revenue would be dedicated to a new transportation stability fund.
“When you pay a tax, whether it’s fixing your car, whether you’re renting a car, whether you’re leasing a car, it makes sense that that should go to roads and bridges and construction and transportation in general,” Kelly said. “So that’s what our plan does from the standpoint of infusing those dollars in.”
Kelly said the plan would tap $300 million in existing general fund revenue the next two years.
House Speaker Kurt Daudt, R-Crown, would not say which areas of the budget would have to absorb that shift.
“There are plenty of resources available to fund this and quite a few other priorities, and still respect Minnesota taxpayers,” Daudt said.
The Republican plan would require the Metropolitan Council to fund metro transit operations and requires the Minnesota Department of Transportation to find 15 percent savings in their budget. That MnDOT money amounts to more than $1 billion over the 10 years of the plan.
Democrats were quick to criticize the plan for relying on borrowing and money from the general fund.
"Unfortunately, the Republican plan is the same old shifts and gimmicks budgeting we've come to expect from them. Siphoning money from schools and hospitals and relying on the state's credit card is no way to fund Minnesota’s transportation system. This is a ‘Give the Deficits Back’ Act," said House Minority Leader Paul Thissen, DFL-Minneapolis.
Senate Majority Leader Tom Bakk, DFL- Cook, said constitutionally-dedicated funding, like the gas tax, is a better approach for transportation. Bakk said the House Republican plan to use general fund revenue could too easily be undone by the next Legislature.
“There’s just no guarantee that roads and public infrastructure are going to continue to be a priority once you've put them in the mix of having to compete with everything in the state budget," Bakk said. "I think it’s unlikely that transportation competes in that environment in the next budget cycle.”
But Republicans stressed repeatedly that Minnesotans don’t want to pay more at the pump in taxes.
In response to the GOP plan, Dayton acknowledged the public’s resistance to a higher gas tax. But he questioned whether the public fully appreciates the state’s transportation needs.
“I don’t know when people are going to come to realizing this is a problem that not going to go away," Dayton said. "It’s only going to get worse, and the only people who are going to be able to do anything about it, to fix it, are ourselves. Whenever that realization sinks in is when we’ll move on it.”
Dayton said he was glad to see House Republicans release their plan, because there’s now something to talk about. Dayton, who wants to spend more than $10 billion on transportation over the next decade, also noted the divide that must be bridged.
“Well, they’re not interested in a gas tax increase. We’re not interested in borrowing from now and from our future. But we’ll have to come up with something or we’ll have nothing,” he said.