Transportation funding dispute re-emerges

ST. PAUL -- Minnesotans might pay more to drive their vehicles, but they would see road improvements, lawmakers said Tuesday while moving closer to another transportation funding showdown.

ST. PAUL -- Minnesotans might pay more to drive their vehicles, but they would see road improvements, lawmakers said Tuesday while moving closer to another transportation funding showdown.

In what has become one of the most controversial issues at the State Capitol, a legislative panel gave competing transportation funding proposals their first thorough hearing of the year.

Republican Gov. Tim Pawlenty's transportation plan, which relies heavily on borrowed funds, was considered along with two House proposals that go a different but similarly familiar route. They use a 10-cent-per-gallon gasoline tax increase and other tax hikes to help pay for road and transit upgrades. The Senate, also controlled by Democrats, is considering a comparable funding plan.

Despite Pawlenty's threat to veto a gas tax increase - as he did in 2005 - the Legislature will move forward with that plan again, Rep. Bernie Lieder said after his House Transportation Finance and Policy Division vetted the three proposals.

"He says he's going to veto it, but it's the only revenue source we have to rely on," Lieder, DFL-Crookston, said of gas tax dollars, adding that a veto override vote is becoming more likely.


Lieder, the committee's chairman, said he will incorporate other funding proposals into his bill before ushering it through his panel next week. Those other sources may include the backbone of Pawlenty's plan - a 10-year, $1.7 billion borrowing initiative.

Legislators might support a variation of the Pawlenty proposal because debt would be paid off with revenue from the voter-approved constitutional amendment dedicating vehicle sales tax, Lieder said.

Local governments are lining up behind a gas tax hike and fee increases, officials told the committee.

Myra Peterson of the Association of Minnesota Counties said because of not enough state investment, more road projects are paid for with local property taxes.

"Funding of these major (highways) on the back of property taxpayers is a very regressive form of taxation," said Peterson, a Washington County commissioner.

The Legislature should stick to transportation funding that relies on the gas tax, registration fees and vehicle sales tax revenue, John Hausladen testified.

Hausladen, president of the Minnesota Trucking Association, said his group's 700 members have already seen rising transportation costs and shouldn't be assessed other charges, such as an increase in the wheelage tax.

Both major House bills allow counties to assess a $20-per-vehicle wheelage tax to pay for road and bridge projects. Vehicle owners would pay the tax when renewing license tabs.


The transportation funding issue sparked a rural-suburban division when Rep. Ron Erhardt, R-Edina, discussed his bill. He would require a vote before a sales tax dedicated to transportation needs is approved in rural areas, but not in the Twin Cities.

"There appears to be a referendum on the metro area, but not in rural areas," Rep. Doug Magnus, R-Slayton, said.

"That's to get even with you" rural lawmakers for approving a Hennepin County tax to fund a new Minnesota Twins baseball stadium, Erhardt replied.

Some legislators sought a tempered approach to the transportation debate. Minnesota can't afford numerous tax increases at the same time, Rep. Mike Beard said. The Legislature should instead look to solve transportation problems over time.

"There is no magic bullet," said Beard, R-Shakopee. "There's just a whole box of little lead bullets and every year we need to shoot a few more off."

State Capitol Bureau reporter Don Davis contributed to this story. Davis and Scott Wente work for Forum Communications Co., which owns the Bemidji Pioneer.

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