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GOP transportation proposal leaves plenty of room for tax cuts

MinnPost photo by Briana Bierschbach
House Transportation Finance Chairman Tim Kelly discussed the Republican plan on Monday.

If there was any question that legislative Republicans are serious about “giving back” at least some of the state budget surplus, it was answered with the transportation-funding proposal they unveiled Monday.

Republican leaders offered a plan that spends $7 billion over ten years but does not raise any kind of tax and, more significantly, uses only $228 million from the state’s current $1.9 billion budget surplus. 

That leaves plenty of room and money for House Republicans to offer tax cuts when they issue their broad budget plan today. And it underscores the Republican argument that the state can spend more on certain priorities without raising taxes.

To fund transportation, Republicans would create a new $3 billion account consisting of existing transportation-related revenue like taxes on auto parts, rental vehicles, and car leasing. The plan also calls for approximately $2.25 billion to be generated in bonding and $1.2 billion from an unspecified “realigning” of existing MnDOT resources. And then, $228 million from the general fund surplus would be used for a “one-time infusion.”

The governor’s office has already labeled the proposal “shift and gift,” meaning Republicans have decided to fund new transportation priorities with existing taxes that now pay for other state spending.

But DFLers seem pleased that Republicans have come up with a plan at all, especially one that approaches Gov. Dayton’s more expansive proposal.

The governor’s and Senate DFL plan is more transparent and more expensive — an $11 billion, ten year plan that’s paid for with a gas tax increase of 16 cents per gallon, a higher metro area sales tax, and higher license tab fees.

A compromise on transportation could require Republicans to cross the no-tax line that is the cornerstone of their plan.

Still, this proposal accomplishes what Republicans say the state should be doing in this time of budget surpluses — prioritizing spending to not only avoid new taxes but send some of that extra revenue back to taxpayers.

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Comments (21)

shell game

Raises no taxes, but it does include taxes on transportation-related revenue sources? When is a tax not a tax? And I wasn't aware of the huge transportation-related tax base we have in the state. That many people rent cars in MN? Really?

"Realigns" existing DOT funds? (That's GOP for we're going to take money from Metro transit projects so our much valued greater Minnesota residents can have smooth roads until the next election cycle but don't have to pay for it themselves.)

And of course bonding was a sacrilege last year but hey, now borrowing is OK.

Roads & Bridges

November 2014 voters sent a clear message that the DOT priority for roads & bridges must be increased and the DOT priority for LRT must be decreased. The House majority heard the voice of voters very well.

How many

Voters would you say in total that would apply to? 10k, 20k? Probably not even that many, but don't worry, that will be rectified come 2016 when you return to minority status, then conservatives can yell until their voices grow hoarse, with no impact whatsoever.

Turnout

It is too tempting to say that "All that is necessary for the triumph of evil is that good men do nothing."

That's a great point.

Of the 35% of voters that turned out in 2014, republican votes amounted to 17% of those. That's all it took for them to talk about mandates and an "overwhelming majority if American's" that favor their policies.

In That Case

I'm sure all those rural voters who cast their ballots for roads & bridges will have no problem paying a higher gas tax, right? Because that tax goes solely to highway construction, not to build transit for city folks.

Incidentally, I thought the right-wing consensus was that rural DFLers were voted out because of their position on gay marriage (not that anyone is against gays, but it's the principle of the thing, ya know). Now, I hear it was roads and bridges. Honestly, it is hard to keep track.

The state funded how much of the Green Line?

Since you've articulated an opinion and feel it is widely shared, perhaps you could give us the dollar amount of state capital funding for the Green Line and its share of total capital funding for the line.

You know that, right?

How so?

I'm pretty sure that transit support Mark Dayton was re-elected as governor.

Magically Appearing New Revenue

The author writes : "Republicans would create a new $3 billion account consisting of existing transportation-related revenue like taxes on auto parts, rental vehicles, and car leasing."

So, does that revenue not go towards transportation needs now? Seems like a safe assumption that it does not.

If not, what existing funds are filling this "new account", where are they being spent now?

It would seem to be a very relevant piece of information.

Think of it like this...

The Republicans are saying "We're creating a magical new account that will fund our plans. It's called the Right Pocket. The money will come from the Left Pocket account. Don't worry your little head about where the Left Pocket money is being spent now - it doesn't matter. The only thing that matters is that we've found a funding source for our programs."

An excellent press release by

An excellent press release by Cyndy Brucato, as per usual.

Not one single word of critical analysis of the GOP "plan". And who exactly are these fictional DFLers who are pleased that the MNGOP came up with a plan? Amazed, perhaps, but you'd be hard pressed to find anyone in the DFL who would actually be impressed with this plan or consider it anything but a non-starter.

And how sad is it that someone as well-connected in the MN GOP like Ms. Brucato still can't pry loose any actual details on this plan for what priorities would be realigned? (aka, where they plan to screw over Mpls/Saint Paul?)

Remember...

... when all those rural voters elected republicans thinking they'd get better roads and stuff out of the deal? Yeah. That was funny.

An Incomplete Plan And, Incomplete Reporting

The Republicans in the Minnesota House should be ashamed of themselves. Perhaps, MinnPost should be as well.

House Republicans propose to spend $7 billion over the next two years but outside of the one-time money from the current budget surplus and the bond sales. But, they plan to raise the remaining $4.2 billion exactly how? And, why weren't the House members who proposed this "plan" asked a couple of very important questions?

Diverting an average of $300 million per year for 10 years from the General Fund requires substantial cuts in other places. Where? And, how much from wherever?

And where or how do they imagine they will find the $120 million per year over the 10 years from "realigning" or "efficiencies" in the Department of Transportation?

An honest plan provides some specifics on what will cut or diverted. I cannot imagine I am the only one asking these questions.

Honest reporting requires at least asking the Republican House leadership for some answers to what seem to be reasonably relevant questions. If they refuse to divulge their plans, that should at least be included in the story.

Exactly

"And where or how do they imagine they will find the $120 million per year over the 10 years from "realigning" or "efficiencies" in the Department of Transportation?"

You're right. That really makes no sense at all. Sure, if you want to put the Dept of Transportation under the microscope and figure out what they can do better to save money, that's fine. More power to you.
But that's a one shot deal or at least it should be. You fine the areas needing realigning, fix 'em, and that's that. You certainly don't do that every year with the hope of finding $120 million in savings every single year. That's just plain stupid.

Just A Simple Question

Can Republicans DO math?

This transportation plan seems to provide a resounding answer:

NO!

This just DOES NOT add up,...

(unless, of course your agenda is to provide future deficits running into multiple decades,...

so you can claim "we can't afford" all those programs that help people who,...

through no fault of their own,...

actually NEED help).

Fix what we have

Before we go spending a billions putting LRT down residential streets in front of single family dwellings, let us focus on maintaining the infrastructure we do have before we spend money we don't have on something only a small percentage of the population utilizes.

Daily ridership

Daily ridership on the LRT lines is comparable to some highways in the region, and definitely higher than some rural highways they want to expand. By your logic most highways only carry a small percentage of the population so we don't need to fund them either.

The state chipped in about $86 million for the Green Line

I adore incessant teeth-gnashing about transit investments in light rail out of state coffers. It's always based on ignorance about transit finance.

As a general rule, the state spends most of its transit money on operating expenses, the bulk of the funds coming from the constitutional mandate of 40% of the motor vehicle sales tax. The split of that money is 9/1 Twin Cities to the rest of the state.

Metro Transit light rail has significantly lower operation expenses than buses - 35% lower per passenger-mile. In 2013, the state picked up about 60% of the operating expenses of Metro Transit.

What this means is, on a passenger-mile basis, light rail saved about $18 million over what it would cost to run buses. This translates into a savings for the state of about $10.6 million. So an $86 million capital investment (only 9% of the cost of building the Green Line) has a simple payback of about 8 years in terms of reduced operating expenses.

Another irony for "conservatives", of course, is that a significant aspect of operating expense savings of light rail is lower labor costs, which means fewer union laborers benefitting from state government dollars. Of course light rail also reduces the costs of building and maintaining roads, which buses do an extraordinary amount of damage to.

But if your mindset is "I don't use transit, so let's not fund it" and you just lump "government" into some amorphous pile and hate it for existing, then naturally the misinformed complaints about transit spending will follow.

A good tell to the emptiness of "fiscal constraint" complaints is the general lack of noise about the $700 million bridge to nowhere being built between Stillwater and I-94 -- a bridge that will carry significantly less traffic than University Avenue at Snelling or the Green Line itself. This is a bridge Michele Bachmann got fully behind.

More magical thinking

Cut revenue and spending and government services, roads, and better education systems with affordable tuition's will just "manifest" themselves.

The problem with republicans is that they think the United States got where is today via magical destiny that just manifested itself. They don't realize that we got where we are today buy having a functioning government that responded to the nations economic and public challenges.

Somalia isn't a country with a destiny that failed to manifest itself, it's a country without a functioning government. It's not a coincidence that every affluent and successful nation on the planet has a well developed and functioning government.

The Republicans are one-trick ponies

If there is a budget deficit, then we're supposed to cut taxes on the wealthy "to stimulate investment" but implement stealth taxes on ordinary people and call them "user fees."

If there is a budget surplus, then Minnesotans are "overtaxed," and we need to cut taxes on the wealthy to avoid prompting them to move to Florida and return the surplus to "the people" (in the form of double-digit checks for most people and triple-and quadruple digits for the wealthy and quintuple-and sextuple-digit checks for major corporations).

Rain or shine, the Republicans' prime objective is to cut taxes on the wealthy, and some add the corollary of making the poorest of the poor pay income taxes "so they have some skin in the game."

So transparent!

Article Title

Shouldn't the GOP's plan and the title of the article be changed to "Road & Highway Proposal" instead of "Transportation proposal"? There isn't a mention of LRT anywhere in this plan, which is a large part of any modern transportation plan.

I understand the GOP doesn't like mass transit as they've carved out a political position that pitches rural voters against metro constituents, but they should keep in mind that conservatives live in the metro area too and also use light rail. To concentrate on just roads and just roads in rural areas ignores a large part of their voting block. Not to mention if they want to enlarge their voting block, they should reach across the isle and cut some deals with their counterparts. That will go a long ways towards winning back some independent voters who are tired of the partisan rhetoric that passes for legislation these days.