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Is a deal possible? Sticking points to state transportation plan include transit, funding sources

ST. PAUL -- State Rep. Tim Kelly believes he and Sen. Scott Dibble could negotiate a long-term transportation plan in about an hour.Dibble, chair of the Senate's Transportation and Public Safety Committee, thinks Kelly is wrong: It would take the...

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ST. PAUL - State Rep. Tim Kelly believes he and Sen. Scott Dibble could negotiate a long-term transportation plan in about an hour.
Dibble, chair of the Senate’s Transportation and Public Safety Committee, thinks Kelly is wrong: It would take them only half an hour.
“I think we know roughly speaking which elements from each other’s package we would accept and which ones we would reject,” Dibble said. “We can figure out the differences fairly quickly.”
But there’s no transportation deal on the eve of the 2016 legislative session. And there might never be one, despite the friendly relations and common ground between the House and Senate’s key negotiators and the universal agreement that lawmakers should pass a comprehensive transportation plan before they go home in May.
How can a deal be so close and yet so far? Although Dibble, a DFLer, and Kelly, the Republican chair of the House Transportation Policy and Finance Committee, get along well, the same can’t always be said for the rest of Minnesota’s divided Legislature.
In appearances last month, Gov. Mark Dayton, Republican House Speaker Kurt Daudt and Senate Majority Leader Tom Bakk highlighting the problems with the other side’s plan: Daudt said a package should drop metro-area transit coverage, a top priority of many Senate DFLers, while Dayton and Bakk have both criticized the core of the GOP funding proposal.
“I’m pretty pessimistic (that) we’re going to just sit down and negotiate a transportation finance bill,” said Bakk, a Cook Democrat.

Why it matters
Minnesota is not spending enough money to maintain its existing road system, let alone expand it to meet a growing population, a recent bipartisan commission found. Most lawmakers agree.
And things will only get more expensive with time.
“The projects that are waiting to be constructed get more expensive every year they’re delayed. So the cost to taxpayers ultimately is higher,” said Margaret Donahoe, who supports increased funding as executive director of the Minnesota Transportation Alliance.
The federal government will not help much. The recent federal highway bill lowers funding for state road construction, and with expanding entitlement costs, no one expects a major increase anytime soon.
Business interests also want investments in “a safe, reliable, multimodal (transportation) system that serves the entire state,” said Bentley Graves, the Minnesota Chamber of Commerce’s policy director for health care and transportation. Matt Kramer, president of the St. Paul Chamber of Commerce, said potholes and congestion aren’t just annoying. They hurt the bottom line.
“Go back to the basic precept of why we have a transportation infrastructure: It moves things around,” Kramer said. “When you’re stuck in traffic, you’re not doing your job. You can’t do your job.”

On the table
There are two big undecided questions when it comes to a transportation bill: how to pay for it, and what to do about transit.
On the money side, Dayton originally proposed raising about $440 million per year from a gas tax increase to fund roads and bridges. But fierce opposition to a gas tax increase from Republicans has left that idea essentially dead.
The other major revenue proposal is a Republican plan to shift around $325 million per year in sales tax revenue from auto parts from the general fund to a dedicated transportation fund. DFLers have at times suggested they’re open to that idea, and at other times criticized it for taking money away from other priorities.
Dibble said that if the auto-parts sales tax does fund a transportation package, he would want to amend the Minnesota Constitution to dedicate that money to transportation. Otherwise, he said, future legislatures could just raid that money to balance the budget or fund other programs at the expense of road work.
Other potential revenue sources include increases in vehicle registration fees, which in proposals last year could raise as much as $150 million per year.
The other major piece is transit funding, where there are recent signs of a possible deal.
DFLers and Twin Cities interests say that expanded mass transit in the metro is essential to any deal - but many Republican lawmakers are hostile to spending more money on buses and especially trains in the cities. Last year, DFL plans would have raised billions of dollars for transit by a half-cent sales tax increase in the metro, while Republicans offered a plan the Met Council said would have led to service cutbacks.
In 2016, though Daudt continues to criticize metro-area transit funding, Kelly acknowledged a final package has to include it if it’s going to pass.
The Minnesota Chamber of Commerce, which helped lead opposition to a gas tax increase last year, also said that a final package “has got to provide funding for roads, bridges and transit,” said the chamber’s Graves. “That’s transit in the metro area and transit in Greater Minnesota.”
Dibble said a transportation package without long-term funding for metro-area transit can’t pass the Senate - but Daudt said a package that does include major funding for metro-area transit might not pass the House.
Kelly and the Minnesota Chamber of Commerce both said that some funding for Metro Transit is essential to getting a deal done. But what form that funding takes is up in the air.
Possible compromises include giving metro counties the ability to opt out of a proposed metro sales tax hike, requiring counties to opt into the tax or sending it directly to a popular referendum. A tax increase also could be tied to governance reform for the Metropolitan Council.
In addition to metro-area transit, all sides agree the state should increase funding for transit in Greater Minnesota.
With the state’s current budget surplus, one option is to punt on major long-term funding and simply make a one-time investment into roads and bridges with borrowed and saved money.
The prime supporters of a transportation package are leery of passing only one-time measures.
“It can be difficult when legislators say, ‘Oh, we increased funding by $100 million,’ “ Donahoe said. “It can sound like a lot of money, but in fact, when you look at what these projects cost, it’s not a lot of money.”

Can it get done?
With the Democratic-Farmer-Labor Party controlling the Senate and the governor’s office and Republicans controlling the House, any transportation deal will have to be a compromise, where each side gets some of what it wants - and has to accept some things it doesn’t want.
If a gas tax increase is truly dead, then a long-term deal to fund road and bridge work likely depends on DFLers accepting the removal of $300 million or more in auto-parts sales tax from the general fund. With a projected $900 million budget surplus, Minnesota can afford it - but it would leave little money for other priorities, such as tax cuts, early childhood education or rural broadband.
Similarly, Republicans might have to accept an increase in metro-area taxes to support Metro Transit - including future light-rail lines many of them loathe.
Neither party in the Legislature has yet made its peace with these concessions.
“That’s what the session is for,” said Kelly. “We just have to be open to that whole negotiation, compromise discussion.”
The fate of a transportation bill could end up having nothing to do with transportation. Instead, it could become a bargaining chip with other major proposals on the table this year, including tax cuts. Concessions that one side makes in a tax bill could be tied to victories in the transportation package, or vice versa.
“These things are eminently doable,” Dibble said. “The only barriers are kind of external politics and the electoral considerations.”
The Pioneer Press is a media partner with Forum News Service

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