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Dayton offers to drop gas tax increase

ST. PAUL -- Minnesotans likely will pay higher vehicle license fees if the governor and lawmakers reach a transportation funding deal this year. Democratic Gov. Mark Dayton Monday offered two transportation funding plans that he called compromise...

ST. PAUL -- Minnesotans likely will pay higher vehicle license fees if the governor and lawmakers reach a transportation funding deal this year.

Democratic Gov. Mark Dayton Monday offered two transportation funding plans that he called compromises, and both contained higher tab fees. Senate Democrats already have included that in their plan and the House transportation chairman has said raising tab fees is possible.

Legislative leaders and Dayton say finding a transportation funding compromise is key to smoothly ending this year's session.

House Speaker Kurt Daudt, R-Crown, said after receiving Dayton's proposals that no transportation deal was reached, but added he remains optimistic one will be. He said Dayton did not move far from his original plan.

Dayton said the public wants politicians to fund transportation needs. "That responsibility now falls upon all 201 legislators. I urge their support to pass this transportation funding bill."

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One of Dayton's Monday proposals includes a nickel-a-gallon gasoline tax increase; Republicans have said any gas hike is a non-starter. The governor's other plan dumps the new tax, but increases tab fees $400 million a year.

The governor's original plan would have raised about $600 million a year mostly by the gas tax, but he also included a smaller tab fee increase. His new plans call for the $400 million in tab fees and $200 million taken from other state programs funded by general taxes.

House Republicans want to transfer $300 million annually from other state programs and would borrow roughly $300 million annually

While the House and Dayton look for $600 million a year in new transportation money a year, the Senate plan would be $1 billion. Senate Democrats would increase the gas tax 12 cents, increase tab fees, borrow money and increase sales taxes in the Twin Cities for transit. Dayton also would allow a Twin Cities sales tax increase for transit.

Under the Dayton tab fee proposal that does not have a gas tax increase, fees on a $30,000 vehicle that now are $385 would rise to $509 in the first year and from $35 to $55 after 10 years.

House Transportation Chairman Tim Kelly, R-Red Wing, has said Republicans could accept a tab increase, but criticized the Democratic Senate plan as being weighted too heavily on lower-priced vehicles.

The governor and key legislators agree that at least $600 million a year is needed for a decade to bring state roads and bridges up to standards.

Dayton and legislative leaders have said that once a transportation deal is cut, other major issues of the session can fall into place before its mandatory May 23 adjournment. Other issues awaiting a transportation decision include changes in the $42 billion, two-year budget enacted last year; public works funding; and tax cuts.

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