One plan raises $6 billion over the next decade and has been criticized as a burden on the pocketbook of Minnesota families. Another plan raises $0 has been called “pure fantasy.”
Welcome to the 2015 Minnesota transportation debate.
The parameters of what could be an ugly fight at the Legislature over how to fix the state’s dilapidated transportation system are now set, after Democrats in control of the Senate released their transportation package on Monday. The House Republican majority released their plan last week, and DFL Gov. Mark Dayton has been talking about the top-line details of his transportation package since last fall’s election.
The last time Minnesota lawmakers raised revenue for transportation was in 2008, and state officials say those funds are falling short of current needs. But finding agreement could be tough this year. The parties are far apart on how to solve the problem — and how big the problem is.
“I say $6 billion and they say nothing?” a frustrated Dayton said last week during the press conference at which he made his “pure fantasy” remark about Republicans’ proposal. “This is not a beginning of a sensible conversation.”
Here’s an overview of the major plans, and how policymakers think the 2015 transportation debate will play out:
|Senate Democrats||House Republicans|
|Amount of funding|
|Source of funding|
Democrats go big
Democrats at the Capitol and transportation advocacy groups are presenting a (mostly) united front on how to tackle what the Minnesota Department of Transportation (MnDOT) estimates is a $6 billion funding shortfall for transportation over the next 10 years.
Dayton was the first to detail the broad outlines of his plan to maintain the state’s crumbling roads and bridges. His proposal: apply a 6.5 percent sales tax to gasoline at the wholesale level — that’s on top of the state’s current gas tax at the pump — and increase the license tab fees that car owners pay every year. The plan also includes a sales tax increase in the metro area for transit projects. The plan would raise $5.8 billion over the next decade.
Dayton’s big-ticket items mostly align with the plan released this week by Senate Democrats and Move MN, a coalition of transportation funding advocates. “I think we have a really responsible approach,” said Sen. Scott Dibble, DFL-Minneapolis, the chair of the Senate Transportation and Public Safety Budget Committee. “Failure to act costs money; it’s just whether you are going to pay out of your back pocket or pay out of your front pocket and do a proactive investment.”
Senators want a one-cent sales tax increase to pay for metro-area transit projects, and they want that portion to help cover the state’s remaining costs on the Southwest light rail line. The state owes about $120 million on the project, which is embroiled in a legal battle over its current route.
There’s one fairly big caveat, however: Democrats’ plan may require some recalculations if gas prices stay low. The sales tax on gasoline at the wholesale level would bring in different revenues depending on prices. At $2 per gallon gas prices, for instance, it would increase costs by about 12 cents, Dayton said. At $4 per gallon gas, prices would go up more than a quarter per gallon. Dayton’s $5.8 billion figure was calculated based on gas prices at $3.25, and if prices continue to stay low, the administration would have to fill in some revenue gaps.
“If it stays at $2.25 a gallon for the next couple of years, then that revenue is going to be less,” Dayton said. “If we find in two years that the price is still there, we’ll have a lot of other benefits from that, and we’ll have to deal with our revenue projection.”
Republicans offer short-term plan
House Republicans have offered what they admit is only a short-term proposal to address the state’s transportation needs.
They would pump $750 million into roads and bridges over the next four years, $200 million of which would come from the state’s $1 billion budget surplus. Republicans are also proposing to direct MnDOT to find $65 million in “savings” and “efficiencies” in their budget to put into things like pothole repair.
Their plan would also call on MnDOT to allocate 90 percent of the unreserved balance in the Trunk Highway Fund to roadwork for four years. Those dollars, which gather when projects come in under bid, would open up $223 million for road and bridge spending in 2016 and 2017 and another $282 million in 2018 and 2019.
Unsurprisingly, Republicans didn’t include any money for mass transit projects in their plan — and they are unlikely to do so. The party spent the summer and fall telling voters that outstate roads and bridges were neglected to invest in things like light rail lines in the metro.
Rep. Tim Kelly, R-Red Wing, chair of the House Transportation Policy and Finance Committee, said Republicans’ plan reflected the need for more time to put together a comprehensive transportation-funding plan. “What we need to do is just reinvest in our infrastructure, in our roads and bridges,” Kelly said. “What we can do without raising taxes is fund transportation to the tune of $750 million.”
Can they reach a deal?
Comparing his plan to Republicans transportation package, Dayton seemed pessimistic about the chances of something passing this session. “[Their plan is] not a solution. It’s not a short-term solution. It’s not a long-term solution,” Dayton said. “To me it demonstrates that they don’t understand the problem, and they don’t have any serious interest in finding a solution.”
Republican House Speaker Kurt Daudt has refused to slam the door on raising new revenue for transportation, but he says it’s unlikely Republicans will vote for a tax increase.
He released a statement Friday saying he was disappointed in Dayton’s remarks on the transportation debate, but promised to keep working with Democrats this session to find common ground. “Minnesotans elected a divided government with the expectation that we’d work together to move our state forward,” Daudt said.
Dibble gave a simple assessment when asked about the chance of getting Republican support for a proposal that includes tax increases: “That will be a problem.”