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Minnesota Chamber sees big role for business in state’s transportation-funding debate

MinnPost photo by Briana Bierschbach
Doug Loon wants to wield the chamber’s powerful lobbying arm at the Capitol to get a long-term transportation funding deal done this year.

Sitting in his office on the 15th floor of the Securian Building in downtown St. Paul, Doug Loon has a clear view of the Minnesota State Capitol, its 111-year-old dome swaddled in plastic as construction crews finish up restoration work.

Loon is coming up on his nine-month anniversary as head of the Minnesota Chamber of Commerce, the single largest group representing businesses across the state. So far, he’s spent most of his time on the job traveling around Minnesota to meet individual business leaders and members of the group. But in the next two months, his work will be mostly focused just up Cedar Street from his office in St. Paul.

Loon wants to wield the chamber’s powerful lobbying arm at the Capitol to get a long-term transportation funding deal done this year. Democrats in control of the state Senate and Republicans in control of the House hit an impasse last year over whether to raise the state’s gas tax to pay for transportation improvements, a move backed by Democrats, or to use existing tax revenues on auto parts and repairs and dedicate them to roads and bridges — an option that raises less money than the proposed gas-tax increase. Now, with the 2016 session underway, both parties say they want to get a deal on transportation this year, but there’s still a big divide on how they want to get there.

That’s where Loon sees businesses coming in. He’s teamed up with labor unions and other business groups – like regional chambers of commerce and the Minnesota Business Partnership – to try and find common ground between Democrats and Republicans. The transportation funding bill made it all the way to a conference committee last session, so Loon said the work is already halfway done.

“We are optimistic,” said Loon. “The ball is on the 50-yard line, there’s a clear path forward. There’s a few unknown factors that are, yes, significant, but I don’t think they are insurmountable.”

Business wants transit, but no gas tax

Business teaming up with labor is a recipe that’s worked before. In 2008, a similar coalition pushed for a long-term transportation funding deal and helped the Legislature override a veto from Republican Gov. Tim Pawlenty to raise the state’s gas by a nickel. To pay for transit projects, legislators also voted to increase license tab fees and raised sales taxes in the metro-area by a quarter cent.

“When the labor groups and the chamber get together, it’s usually when stuff gets done,” said Harry Melander, president of the Minnesota Building and Construction Trades Council. “If it doesn’t, then I think we have a much bigger problem with the people up at the Capitol.”

But this isn’t 2008. For one, business groups aren’t pushing for an increase in the gas tax this time around. They mostly support the Republican plan to use existing driver-related sales taxes, putting that money toward roads and bridges. But they also want transit to be part of the equation, which is being pushed by Democrats.

“Historically, transit has been part of this discussion,” Loon said. “We believe that will be the case again. We know how important transit can be in the here in the metro, but also in greater Minnesota for rural communities that rely on mobility. We want to make sure transit is part of the discussion, because without it, I fear we won’t be able to move it out of conference committee.”

The transit part of the debate could be where business help is most needed to sway Republican votes.

DFL Gov. Dayton and Democrats in the Senate have pushed for a sales tax increase in the metro to help them pay for transit maintenance and expansion, but they need the backing of the Legislature to do that. What’s more, the controversial Southwest Light Rail Transit line needs $135 million in state funds this year or otherwise risk losing out on $887 million in federal funds for the project.

“If you think of our membership, they are global and they go all over to cities and they see very effective transit,” said Charlie Weaver, a former chief of staff to Pawlenty who’s now head of the Minnesota Business Partnership. “They come back here and they want to grow these companies. But with these demographics and millennials’ approach to jobs, they don’t have cars, they don’t want cars. We need to figure out how to get them to and from these jobs. This is an important aspect when you think about the two biggest things that businesses care about when deciding to come to a state: talent and infrastructure.” 

But Republicans in the House have been openly hostile toward the idea of expanding transit, campaigning in 2014 against a DFL majority they said only focused on transit at the expense of outstate roads and bridges. The chamber and the Minnesota Business Partnership are influential with Republicans, who they’ve helped elect to seats in the state House and Senate.

“We wanted to be crystal clear that this is a priority for us,” Weaver said of an overall transportation deal. “This isn’t an afterthought. This isn’t, ‘Gee, if you get around to it.’”

Big picture, few details

Sen. Scott Dibble, chair of the Senate Transportation Committee, has been openly frustrated with the lack of urgency on transportation from the business community in the past. Last session, smaller regional chambers of commerce supported new transportation funding, but the state chamber was reluctant to join MoveMN, a now-defunct coalition of groups pushing for a deal on long-term plan. This time around, the business community has been engaged in a “more positive fashion” in the lead up to session, but Dibble wants them to get more specific about what they want out of a deal.

“We want there to be a deal, but we want there to be a real deal,” said Dibble, a Democrat from Minneapolis. “They are reluctant to come out with anything specific. The business community of course is very directly self-interested in making sure there’s transit. That’s how we are going to create greater economic opportunity. That’s how they are able to bring in a diverse workforce.” 

Weaver, who has been involved in politics for a long time, said right now Republicans and Democrats are holding to their ideal plans as leverage to get the most out of a final deal. “It feels like those who are argue for a gas tax know that’s not real. [Senate Majority Leader] Tom Bakk knows that; he’s a brilliant negotiator,” Weaver said. “They are teeing that up for leverage.”

Loon is new to the Minnesota Chamber of Commerce, but not to politics. Before joining the state chamber, he was a longtime Midwest regional­ executive for the U.S. Chamber of Commerce. And his wife, Jenifer, is a four-term Republican representative from Eden Prairie (“Our paths will cross occasionally, I expect,” he said of the 2016 session).

Loon knows legislators will ask business leaders to be more prescriptive about what they want in a final transportation deal. For now, though, Loon said he wants to try and figure out what’s possible to get done in this session, which will serve as a precursor to a major election this fall, with all 201 legislative seats on the ballot. “They will be looking toward the business community for input,” Loon said. “But we are not that that point yet.” 

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Comments (11)

  1. Submitted by Jim Million on 03/14/2016 - 10:20 am.

    Please take it easy, folks

    Let’s not play the “What’s in a name?” game. Chuckle, absolutely…well, OK, let’s have a little laugh, and get on with it. I’m musing over the possibility that Doris Ladyslipper was a close second in hiring committee conversations.

    In any case, Doug Loon seems to be doing a very good job.

    [and, I’m quite sure he’s heard them all, anyway]

  2. Submitted by joe smith on 03/14/2016 - 10:46 am.

    Any shot at using current gas tax, sales tax on cars, licensing and registration fees on cars and all the other fees we pay for transportation going towards roads and bridges? Those fees were put in place with the promise of taking care of our state roads with money raised. Now in typical Govt fashion we need more money because those fees somehow are not enough because they get raided and shifted around to pet projects by our elected officials and their cronies. When you give elected folks unlimited access to other folks money, they will find a way to over spend it and soon be asking for more.

    • Submitted by Jim Million on 03/14/2016 - 11:24 am.

      In part,

      we the faithful voters are more than a little bit responsible for the caliber of elected officials we have elected. What are the standards these days?

      Only a few years ago some were proposing revenue from selling some of our abundant potable water supply to southwestern states. They were truly serious about raising funds by selling our most fundamental and diminishing asset. Now, again, White Bear is working on another way to refill its lake; and, New Brighton has already issued an alert for this year…and it’s still March.

      Few seem to remember the days of “dedicated funds.”

      There’s never any bright hope from the dim.

    • Submitted by Ray Schoch on 03/14/2016 - 11:30 am.

      Where to spend it?

      My understanding – subject to correction – is that most of the current compendium of transportation taxes and fees is already directed toward roads and bridges, with mass transit getting, at present, a much smaller share of that particular fiscal pie. If my impression is correct, then those taxes and fees have not kept up with rising costs, and those costs are driven by the private sector, not the public one.

      It’s not limited to elected officials, but otherwise I’m inclined to agree that overspending is pretty painless when it’s someone else’s money – almost any parent could provide examples from their own children’s spending habits unless/until some fiscal lessons are learned. I’m not aware, however, of transportation funding being raided and/or shifted around to provide the funding for an elected official’s “pet project” in Minnesota. Can you provide examples?

      Part of the problem is that we (and most states) have numerous federal highways, for which federal gas tax dollars are intended. The federal gas tax hasn’t been raised in about 20 years, which leaves states with little choice but to make up the slack themselves if a new stretch of road is deemed necessary. I’m not a traffic engineer, but it seems safe to guess that highway construction costs have escalated quite a bit since the mid-1990s. Most federal highways are *built* primarily with federal dollars, but the *maintenance* of those highways is then left to the state, and maintaining a paved highway over a generation and more is often far more expensive than its initial construction.

      • Submitted by Jeffrey McIntyre on 03/20/2016 - 06:49 am.

        Fees and Taxes

        Current fees and fuel taxes cover about 40% of the cost to build and maintain road infrastructure in Mn. Mn is 5th in the nation in terms of paved lane miles of roads…and 12th in terms of population…difficult to make the math work if you don’t want to raise fees/taxes; but you want to maintain / build highway infrastructure. One thing you don’t want to do is overextend on bonding. 20% of Wisconsin’s transportation spend is paying off bonds…it’s the gift that keeps on giving.

  3. Submitted by Joel Stegner on 03/14/2016 - 01:22 pm.

    Long-term transportation solutions

    Gas prices are sitting at about half of what they were a few years ago. If there is every time for a small increase in gas taxes as part of a comprehensive package to completely fund our transportation and transit needs, the time is now. Due to our winters, our infrastructure rusts and decays at a higher than average rate. That means our transportation system costs more. All studies suggest that we are years behind on maintenance, not to mention building out transit systems and adding high capacity at bottlenecks throughout the state.

    Failure to spend the money means, avoidable injuries, lives lost and excessive wear and tear on our cars. Inadequate transit and paths for bikes and walkers means that people who don’t want to drive and add to the congestion. Finding common ground when you are willing to torpedo it all because of a minor tax increase is simply foolish for a state that has been highly successful, but because of its wonderful weather, because we seek smart, groundbreaking solutions.. Let’s do it this year – get it off the plate so we don’t continue to muddle along permanently.

  4. Submitted by Bill Willy on 03/14/2016 - 02:55 pm.

    And I want free rent and an appliance voucher or two

    “Business wants transit, but no gas tax.”

    And

    “They mostly support the Republican plan to use existing driver-related sales taxes, putting that money toward roads and bridges.”

    The big compromise is, I guess, “allowing” transit to be included.

    But what I want to know is what cuts will be made to pay for the $500 million that Republicans and the Chamber want to take from the general fund and apply to transportation instead of asking Minnesotans (including business owners and Chamber members) to pay for the transportation system they use (and wear out) every day.

    Will that $500 million come out of Health and Human Service’s budget? Education? Public Safety? Environmental regulation?

    It’s easy as pie for Republicans and the Chamber to say, “There’s plenty of money in the state’s budget, the surplus and bonding (deferred and more costly taxes) to pay for transportation,” but when it comes to providing more detail, Minnesotans should be informed as to what budget cuts will be made to make up the $500 cut to the general fund.

    Also, Ray is 100% correct: Transportation (expansion and maintenance) costs have gone up substantially since the 1990s and since the last (measley 5 cents per gallon) gas tax increase. And, of course, the across the board (state and federal) “Read our lips”/Grover Norquist allegiance that has automatically rejected almost ANY tax increase of any kind for the past 20+ years has created the standard and predicatble deficit reality the DoT has been forced to deal with all that time (not to mention the general deterioration of our state’s overall infrastructure).

    For some reason, Republicans and the Chamber are fine with the price of gas increasing 300% or 400% between 1999 and 2005 or 2006 (99-cents to right around $4.00). They’re totally okay with that kind of increase being imposed on consumers (and businesses) when its the “private sector” doing the imposing. But anytime “the government” attempts to add 5% or 6% to the cost (to cover basic maintenance and no profit whatsoever) everyone screams bloody murder, crooked politicians, crony capitalism, “Government is the problem,” etc..

    “A gas tax increase is not necessary.”

    No. Of course not. But then again, neither are price increases in the products and services the private sector sells to the state to maintain and improve our state’s transportation system.

    If Republicans and the Chamber want to make it “legally unnecessary” for state government to charge the people that use the system what it costs to take care of and improve it then I think it’s only fair they also make it “legally unnecessary” for the private sector to increase the price of “related inputs.”

    The state ought to be able to purchase, say, General Motors, Ford, or any make and model of truck the DoT purchases at the price they sold for the last time the gas tax was increased.

    The state ought to be able to purchase the fuel for those trucks on the same basis.

    And same for the thousands of miles (millions of yards) of concrete poured all over the state.

    Any road construction contractors should be contracted with at the same rate they were “back in the day” (before the last gas tax increase) and “Not a penny more!”

    So on so forth.

    What’s good for the goose certainly ought to be good for the gander. If Republicans and the Chamber don’t think Minnesotans should have to pay for increases in the cost of their transportation system they should certainly agree that Minnesotans should not have to pay for the increases in prices the private sector charges the state for the products and services the state buys from the private sector to help maintain that system.

    But no no no. . . We can’t have THAT! We can’t have that because . . . Well, because . . . That just wouldn’t be RIGHT, would it.

    No. Of course not. The business community needs to be free (at all times) to increase its prices (to cover its “cost of doing business” while remaining profitable) and pass those costs on to consumers. But when the (evil) government tries to do a much smaller, much less expensive version of the same thing (5% or 6% increase vs. hundreds of percent) without any profit involved, that is absolutely, positively out of the question, “fiscally irresponsible,” more evidence of just how dysfunctional government is, etc..

    If the state can find ways to pay its bills without raising its prices, and the private sector is so much more fiscally astute and efficient than government, it should be easy peasy for Minnesota’s businesses (under the Chamber’s guidance, of course) to find ways of doing the same thing. All they need to do is follow the Republican Plan:

    Stop raising prices and cut spending!

    (And, as Joe would recommend, I’m sure, quit engaging in whatever crony capitalism they are).

    And in the meantime — while they’re conceptualizing and implementing that plan — it would be good of Republicans and the Chamber to let voters know which government services would be cut and by how much to pay for the $500 million the Republican/Chamber transportation plan would remove from the general fund.

    P.S. “Amen” to Joel Stenger’s comment too.

  5. Submitted by Jim Million on 03/14/2016 - 03:46 pm.

    Not a partisan issue, this, really

    The wear and tear on interstates and trunk highways at Minnesota taxpayer expense comes significantly from ever increasing Seattle-Chicago long-haul semi traffic and corresponding increased inter-urban truck traffic, semis of ever increasing size and weight, it seems. That industry is as well protected by Democrats as Republicans, Chambers as well as Labor interests (perhaps not so much driver related today).

    We apparently can design highways in this (usually) rather frozen clime for auto stress, not so well for tractor-trailer impact. We spend millions to continually add lanes for increased volume, but perhaps not stronger lanes for increased abuse.

    I know about our test lanes and about points of diminishing return, etc. Whatever the effective solutions may be, a paradigm shift certainly is now in order. We cannot simply keep doing the same designs over and over and over.

    If we cannot fund our current issues, how do we propose to maintain all those future lane additions of fairly identical design and construction?

  6. Submitted by Frank Phelan on 03/15/2016 - 05:55 am.

    Alter Of The Free Market

    Apparently, those who worship at the alter of the Free Market (a form of idolatry) believe that they should be able to get their goods to market free of cost to them (but not the rest of us).

    I’m glad the Chamber cleared that up for us.

  7. Submitted by Logan Foreman on 03/15/2016 - 09:23 am.

    Let’s see

    Doesn’t the Chamber also want significant reductions in business taxes this year? Who will pay for such reductions and transportation costs? Oh yeah the shrinking middle class.

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