On the road to a tax hike?
ST. PAUL — Many northwest Minnesotans depend on volunteer bus drivers to get them around, a Crookston woman told a legislative committee hearing Monday, saying that her organization needs continued state support to keep the service operating.
“We want to provide service to everyone, from birth to death,” Cynthia Pic of TriValley Opportunity Council told legislators on House and Senate transportation funding committees, whose chairmen are looking at ways to raise taxes to give transportation and transit fiscal boosts.
Like in large cities, many depend on TriValley to get them to and from work at businesses such as electronics system manufacturer Digi-Key Corp. in Thief River Falls, she said.
The transit system that serves seven counties is just a small part of the transportation picture that two key Democratic state legislators said demands that the state increase revenue to improve transportation.
To begin to fix transportation funding woes they say plague Minnesota, Rep. Frank Hornstein and Sen. Scott Dibble, both of Minneapolis, plan to announce in a week a plan that apparently relies on adding a sales tax to motor vehicle fuel sales.
Much like the existing “gas tax,” their proposal would add a few pennies tax onto each gallon of fuel sold.
Dibble said that he wants a major revenue increase to boost transportation this year. “I just don’t want to put my toe in the water.”
Hornstein and Dibble refused to discuss details of their tax plan, which they said is not final.
Rep. Michael Beard, R-Shakopee, said that it relies on a new fuel sales tax and many Republicans probably would not vote for any kind of tax increase.
“There may be a couple of us,” Beard said.
Beard said he could accept a nickel a gallon increase over five years, but nothing larger.
Politically, Beard added, a tax increase would be difficult for members of either party to support, given $2 billion in higher taxes approved last year. “I think it is pretty unrealistic for it to pass this year.”
House Speaker Paul Thissen, D-Minneapolis, recently questioned whether this is the year for voting in higher taxes.
Gov. Mark Dayton has said he expects election-year politics to provide a roadblock to a tax increase.
However, Dayton Press Secretary Matt Swenson said that the governor several times has said he would like to see transportation funding increased this legislative session, which begins Feb. 25.
“Transportation challenges and projects don’t go away, they just get more expensive,” Hornstein said.
Minnesota Transportation Commissioner Charlie Zelle told lawmakers that fuel taxes are becoming a less important source of funds. He blamed higher fuel mileage and miles driven remaining static.
Monday’s new twist to transportation funding was state and federal officials agreeing that federal contributions to state funding needs likely will dry up later this year. Hornstein and Dibble used that as a reason to bring in more revenue soon.
“I think we are going off the cliff,” Dibble said.
Federal funds make up 20 percent of the Minnesota Department of Transportation budget, Zelle said.