How a transportation deal didn’t get done at the Legislature

MinnPost photo by Briana Bierschbach
State Rep. Tim Kelly: “When lawmakers start believing they are better engineers and they know better to put a whole transportation plan together, that’s a slippery slope.”

It was Saturday, May 21 — the day before Minnesota lawmakers were required to finish their work for the year — when Rep. Tim Kelly went a little rogue. 

He called a joint meeting of the House and Senate members who’d worked for nearly two years to create a long-term transportation-funding package. Negotiations between top legislative leaders had yet to produce a deal, but Kelly, chair of the Republican House’s transportation committee, had an offer for Senate Democrats he thought could break the deadlock.

There was one complication: Kelly’s own Republican leadership didn’t back the plan.

In the end, it didn’t matter. On Sunday night, to break the impasse, lawmakers agreed to a last-minute deal that would have spent one-time cash and a portion of the bonding bill on transportation projects. But Democrats — furious the new deal didn’t include money for public transit — tacked on an amendment with minutes to go before the session’s midnight deadline. Instead of taking up the bill, House Republicans simply adjourned for the year. 

The meltdown wasn’t a complete shock, given how far apart House Republicans and Senate Democrats had been for most of the 10-week session. But it was still a messy and frustrating outcome, for lawmakers as well as voters  — and for Kelly more than most. A Republican representative from Red Wing who had worked to create a transportation package for two years, Kelly not only had a front row seat to the entire debate — from its hopeful beginnings in 2015 to its implosion in the final hours of session this year — he was also convinced he had a plan that could actually pass the Legislature.

“There was so much in that bill,” Kelly says. “I am really at a loss as to why we stepped away from that.” 

The $600 million question

Kelly became chair of the House Transportation Policy and Finance Committee after Republicans reclaimed the majority in the 2014 election. Having never served on any transportation committees before, Kelly was picked because of his reputation for working well with Democrats, which would be key to forging any long-term agreement on the issue. Transportation deals are never easy to come by, and in order to pass they require a coalition of labor, business and other groups, many with disparate interests.

As Kelly says: “The reason they tapped me to be the chair was because it was a situation where you have to sit down with the other side and engage.”

At the time, differences between the newly installed House Republican majority and Democrats in control of the Senate were massive. The DFLers wanted to raise gas taxes to pay for roads and bridges and a metro-area sales tax increase to pay for mass transit. Republicans didn’t want to raise the gas tax at all, and most members were ideologically opposed to light rail, a key element of transit plans for the metro.

Kelly and his counterpart in the other chamber, Sen. Scott Dibble, DFL-Minneapolis, met throughout the 2015 session, but the differences were too great to solve in the midst of a year when the Legislature would be setting the state’s budget for the next biennium. In the end, legislative leaders decided the transportation funding question could wait. They’d take up crafting a long-term solution in 2016. 

But that never really happened. For the majority of the 2016 session, the two sides mostly reiterated the arguments they made the year before, positioning themselves for the end-of-session negotiations. The only thing everyone involved managed to agree on was a number: They wanted to put $600 million into roads and bridges each year for the next decade.

Then, with only one week left in session, Gov. Mark Dayton decided to intervene. He offered two options for legislators to consider in raising money for roads and bridges: one with a gas tax increase and one that relied heavily on license tab fee increases instead.

The next day, Republican leadership responded with their own plan. It also relied on license tab fee increases, though far less than Dayton’s plan. The deal also shifted $300 million from a projected budget surplus into a new road and bridge account to pay for projects and used bonding dollars to hit the $600 million mark.

The plan didn’t, however, include any funding for transit. House Speaker Kurt Daudt said the lawmakers would take up transit funding after a plan for roads was figured out.

Behind the scenes, Kelly was also working, preparing a final package that would incorporate all the things Republicans wanted — but also an offer on transit for Democrats. “We didn’t talk about transit at that press conference, but I was already preparing our offer,” Kelly says.

Among other things, his plan would raise license tab fees to raise $100 million, plus funnel $300 million more in state funding to roads and bridges each year, which has long been a priority for Republicans. But it also got the state “out of the business of building and operating trains,” by allowing five metro-area counties to raise a quarter-cent sales tax to pay for transit projects in the future. Instead of having the state periodically dole out funds for new transit projects (and periodically fight about it), the metro area could take care of the costs by raising their own taxes. “That’s a savings of $750 million over the next 10 years,” for the state, Kelly says.

As part of the deal, Republicans would also score several changes to the Metropolitan Council, the regional planning agency that has long been in the sights of the party’s conservatives. Among other things, the council, whose members are now appointed by the governor, would have staggered terms under Kelly’s plan, and have to be vetted by a group of local elected officials.

“There were just so many wins for us in this bill,” Kelly says. 

One-time plan emerges 

But support eroded for any comprehensive deal, Kelly thinks, when the option for one-time funding for transportation entered into end-of-session discussions. 

In the final weekend of the session, top legislative leaders shuffled in and out of meetings, trying to strike deals on everything from a supplemental budget bill and tax cuts to bonding. But transportation remained the major sticking point, until whispers started of a possible compromise that would only fund roads and bridges for one year.

The idea was to spend about $275 million in one-time cash on specific road and bridge projects and about $300 million in a $1 billion bonding bill for transportation projects. That wouldn’t satisfy those who wanted a long-term plan, but it would put some money into roads and bridges immediately without raising any taxes or fees, particularly important in a year when all 201 seats in the Legislature are on the ballot. And it left out the controversial transit piece.

“That ended up being the discussion,” for lawmakers considering the deal, says Kelly. “Am I going to take a look at the local option tax increase or am I going to throw one-time money at the problem and claim I never raised taxes?”

Kelly had a lot of problems with the one-time funding deal, particularly the fact that lawmakers used earmarks to designate certain road projects for funding. “We are supposed to let [the Minnesota Department of Transportation] do that,” he said. “When lawmakers start believing they are better engineers and they know better to put a whole transportation plan together, that’s a slippery slope.”

Negotiate in ‘good faith’ 

With the focus shifted to a one-time plan, a frustrated Kelly wanted to at least make sure staff and legislators on his committee got some credit for all the work they did in coming up with a long-term transportation deal.

So he scheduled a joint House-Senate transportation hearing and planned to present his plan in front of the committee — with transit included. He made sure to let House leadership know what he was about to do, so they wouldn’t be surprised. “If a decision was made after that to go a different direction, that was on leadership, but not on my staff who worked and negotiated in good faith,” he says. (Daudt said he did not want to comment on Kelly’s actions.)

Members of the committee were supportive. Dibble said it represented “significant” movement toward a deal. Rep. Ron Erhardt, DFL-Edina, said members should pass it and get it to the governor’s desk the next day. “I think we should whiz bang this through and see what happens,” he said.

But Kelly’s plan never made it to the House floor. Instead, the one-time funding plan was put forward — the provision that eventually led to the dramatic end of session. With minutes to go before a midnight deadline, Democrats in the Senate, furious the new deal didn’t include funding for transit, tacked an amendment on to the bill. With time running short, the House adjourned instead of taking up the amended bill. 

Still hoping to get a deal done

Kelly hopes that Dayton will call lawmakers back into a one-day special session to take up transportation and bonding again. If that happens, he wants to be part of the conversation. Kelly, who has served in the House since 2008, is retiring from politics, and he’d like to get some long-term funding in place before his term officially ends. 

His transportation plan could get the backing of Democrats in the Senate and the signature of the governor, he says. And before the one-time funding option emerged, it was also gaining support from some members of his caucus. Whether House GOP leadership torpedoed his plan, Kelly wouldn’t say. “They have a job to do, and in the end they get to make the decisions,” he said. “I was disappointed, yes, but I wouldn’t say anything to disrespect our leadership.”

With a little time away from session, Kelly thinks legislators could revive his proposal and use it as a base to try and get long-term deal done.

“I think there’s still an opportunity, and I will be involved if that arises,” Kelly said. “When we step back, you have to look at what’s best for the entire state of Minnesota. That’s when it’s hard to step back as a representative of a single district.”

Comments (17)

  1. Submitted by Ron Gotzman on 05/26/2016 - 09:36 am.

    Spin?

    ” But Democrats — furious the new deal didn’t include money for public transit — tacked on an amendment with minutes to go before the session’s midnight deadline. Instead of taking up the bill, House Republicans simply adjourned for the year. ”

    This statement more spin and DFL talking points than what actually happened.

    • Submitted by Ray Schoch on 05/26/2016 - 10:42 am.

      It’s not often

      that MinnPost and ‘Strib reporters both get scooped on a development as potentially significant (or divisive, depending upon your point of view) as this transportation package going down in flames.

      Tell us, please, Mr. Gotzman, what actually happened that those media sources missed.

  2. Submitted by Jim Million on 05/26/2016 - 10:06 am.

    Tim Kelly’s Reds…and Blues

    It’s more than disheartening that so many Party “Leaders” view the legislative process as high stakes poker, bluffing other players to a draw when the right cards just don’t come up. Really seems to no longer matter who is cutting or dealing.

    Tim Kelly’s a very good guy from Red Wing, one who should know much about bluffs. Seems he sure got frozen out by those sharps of riverboat gambling this Spring.

    For many of us, their games have simply become various versions of Rummy.

  3. Submitted by Beth-Ann Bloom on 05/26/2016 - 11:04 am.

    Rashomon

    For summer reading I would suggest some Japanese classic Rashomon where the story is told from multiple perspectives so that the audience can learn the truth. Too many stories of the unraveling of the end of the legislative session are being written from the perspective of just one participant with conclusions being drawn about where the failure should be assigned. With multiple Houses, parties, and constituencies we need a fuller picture before blame can be assigned, progress can be made, and intelligent votes cast in November.

  4. Submitted by Mike Schumann on 05/26/2016 - 12:09 pm.

    Getting your work done on time.

    As a taxpayer, I am sick and tired of our politicians arguing down to the wire without any consequences. If they don’t get their work done on time, any costs for any extra sessions, etc should come out of their PERSONAL pockets.

    We also need to quit having these mega deals. All these projects should be split up into individual bills and voted on separately, sinking or swimming on their own merits. If you don’t have the votes for a project, you shouldn’t be able to twist another legislator’s arms by holding up some unrelated project that has majority support.

    This kind of BS is why people are voting for Trump!

  5. Submitted by Nancy Gertner on 05/26/2016 - 02:14 pm.

    Transportation Failure disappointing given its high priority

    Rep. Kelly is retiring, so presumably his actions are not just to benefit his district. Legislators trying to “earmark” which transportation projects are to be accomplished with the limited funding are micromanaging a function that the MNDoT agency is supposed to do for the state. Looks like the House Leadership really blew up a plan Rep. Kelly worked hard to put together. The consequences are that there is no funding for needed transportation improvements. Those of us that drive in other states for business or pleasure cannot help but notice that our neighbors in Wisconsin, Iowa, Nebraska, North and South Dakota generally have roads in much better condition than ours, and have since former Gov. Pawlenty “saved” transportation funding by double hatting his lt governor, and letting a bridge fall down.

    All of our state legislators will be elected this year, and some of them have precious little that they have accomplished for their district, or the state, this year. I know what my legislators accomplished, so I can decide whether to vote for incumbents or not. As a tax payer, I want legislators making informed decisions on how to allocate the states resources. Holding on to the purse strings so tightly that funds cannot be spent to address transportations needs that are essential, or correcting problems dangerous to human lives, is not good stewardship, in my opinion.

    Speaker Daudt must now convince Governor Dayton that he can get his caucus to agree to a transportation plan if he wants a second chance at getting it passed in this election year. And that means funding transit in addition to roads and bridges.

  6. Submitted by joe smith on 05/26/2016 - 03:37 pm.

    Roads and bridges were covered

    Then at the eleventh hour the DFL threw in light-rail funding package and the deal went south. That is what happened according to a legislator who was prepared to vote for roads/bridges before the cash boondoggle rail funding…. Typical trick, try to jam in a pet project late, then claim mean ole Republicans don’t care about roads….

    • Submitted by Jim Million on 05/26/2016 - 06:34 pm.

      From inside the Chamber:

      “Transportation & Public Works Bill. At 11pm on the last night of the 2016 legislative session, with only one hour left to legally take action, House Republican and Senate DFL leaders finally presented legislators with a $1.2 billion proposal to fund public works projects, including some road and bridge projects. There was not time to distribute a copy of the legislation to all members, let alone time to read it, yet they expected us to vote. I voted no, but the measure still passed and was sent to the Senate, where it failed to pass in time. While I wanted to support a transportation and public works package, I am glad I voted against it. Once I received a copy of the last-minute legislation, I found it to be riddled with errors, including a total bond authorization for $1.2 million, not the correct $1.2 billion, among other mistakes. At this point, legislative leaders expect Gov. Dayton to possibly call a special session to give extra time to approve a transportation and public works package, but thus far he has not shown an interest in doing so. If he does, I believe there should be insistence by all involved that: 1) everything be negotiated and discussed in public; and, 2) legislators be given at least 24 hours to review any proposed compromise before it is voted upon.
      Wages for Caregivers. While nursing home caregivers were given a 5% raise last year, disability services caregivers received 0% last year. In the 2016 session, nothing significant was done to aid in recruiting and retaining caregivers who remain grossly underpaid.” [Note the million/billion example. jrm]

      “To see a description of every bill signed into law in the 2016 session, go to:
      https://mn.gov/governor/resources/legislation/.”
      …………………………………………………………………………………………………….
      My oracle: rep.joe.atkins@house.mn

    • Submitted by Logan Foreman on 05/27/2016 - 08:18 am.

      What nonsense Smith

      The metro has to pay far more than “greater” Minnesota for needed transportation costs but also skip transit. Let the metro spend on its own transportation needs and let the outstate pay every dime of its transportation needs.

  7. Submitted by Henk Tobias on 05/26/2016 - 03:45 pm.

    Democrats didn’t just “tack on an amendment” on the bill

    According to Bakk, Daudt agreed to allow an amendment that would let Hennepin County to pay for 20% of certain transportation projects, currently by law counties are only allowed to pay 10%, changing that to 20% would have been enough for Hennepin county to pay the required amount for federal funding to kick in so the SouthWest Light Rail project could move forward. Again, Daudt told Bakk that he would allow it in the house bill, when that bill came over, 15 minutes to Midnight without that amendment Democrats added it back in, as was agreed, and sent it back to the house. With 6 minutes left rather than vote on the bill with the agreed upon amendment Republicans adjourned.

    Republican trashed the transportation bill because they didn’t want Hennepin County to have a choice whether to pay for its own rail system or not.

    • Submitted by Matthew Steele on 05/26/2016 - 07:15 pm.

      Core cities bankroll rural MN

      And rural MN gives us paternalism over what we can do with our own money in return.

      • Submitted by Jim Million on 05/27/2016 - 08:48 am.

        And…

        rural citizens have been saying the same thing about the Metro for decades. Nothing new, other than the Metro perhaps growing faster than outstate Minnesota. One might look at Illinois as prime example of same. Seems to be our growth (and political) model.

        • Submitted by Matthew Steele on 05/27/2016 - 09:16 am.

          Illinois

          Another state where the rural interests are bankrolled the the economic engine of the big city. They resent the hand that feeds them.

  8. Submitted by Joel Stegner on 05/26/2016 - 06:38 pm.

    Transit

    f you want Democrats from the metro area to vote for a statewide package of roads and bridges that they and their constituents will mostly likely never use, then you need to give on transit. A special metro tax is an option – but it works best with matching funds from the state. The metro cannot be expected to provide most of the tax dollars to fund outstate transportation needs, when it’s own needs are ignored. There is ideology and negotiation. In politics, you need to give to get. The chair of the Republican House Transportation Committee seems to get it, but he is retiring. Pass the bill before a Republican ideologue replaces him.

    • Submitted by Jim Million on 05/26/2016 - 09:00 pm.

      Sports Ticketing Surcharge?

      If all did a more honest job of promoting needs vs. wants, more people might sign on to more projects and proposals.

      In the meantime, maybe we should think about surcharges for pro sports tickets. Regular rider fees never pay for transit operations, so perhaps marking up those Twins, Wolves, Vikings, Saints and other venue fees might help. There is a close association of LRT and sports facilities, planned as such.

      Please see previous post, as well.

      • Submitted by Rachel Kahler on 06/02/2016 - 10:05 am.

        Seems reasonable

        I’d go for that solution.

        In the meantime, I’m tempted to kidnap some legislators to go on a road trip in my car through the cities, and then through outstate. Then, I’ll ask them why I have 2 options in the cities: try to find a decent public transit schedule (HA!) to get to work, or beat the crap out of my car on streets and highways with crater-sized potholes–while outstate has very nice roads for far fewer people (paid, in part, by *my* taxes).

        “Compromise” isn’t a naughty word, and it’s time that our politicians stop acting like it is. But, if we’re not going to compromise, I suggest that the metro pay for its own stuff and outstate start paying for its own stuff. I’m sure that’ll go over like a lead balloon, but hey, it’s the responsible thing to do.

  9. Submitted by Tom Anderson on 05/26/2016 - 10:44 pm.

    What I would really like to see

    The governor, Senator Bakk, and Representative Daudt agree to the “secret behind the curtain deal” for a one day special session. Every other member of the House and Senate votes “No” because every single one of those legislators represents an equal number of people who had no say in the deal. Courage!

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