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Minn. transportation funding debate enters third verse

Minnesota Gov. Mark Dayton and Transportation Commissioner Charlie Zelle tell reporters Wednesday, March 22, 2017, that quick action is needed to get more than $100 million in federal transportation funds. Don Davis / Forum News Service1 / 3
Minnesota Gov. Mark Dayton and Transportation Commissioner Charlie Zelle tell reporters Wednesday, March 22, 2017, that quick action is needed to get more than $100 million in federal transportation funds. Don Davis / Forum News Service2 / 3
Minnesota Gov. Mark Dayton and Transportation Commissioner Charlie Zelle tell reporters Wednesday, March 22, 2017, that quick action is needed to get more than $100 million in federal transportation funds. Don Davis / Forum News Service3 / 3

ST. PAUL—There is no debate about a need to infuse money into Minnesota transportation projects, but plenty of division among the major players in how to get that money.

Little has changed in the past three years.

Republicans in control of the state House and Senate have updated their plans of the past two years to take money now going to other state programs to boost spending on roads and bridges, and borrowing other funds. Democratic Gov. Mark Dayton still wants to raise the gasoline tax for roads and bridges and a Twin Cities sales tax for transit.

Transportation funding is more complex than financing many areas of state government since some money comes from general state tax receipts, some from a fuel tax and still more from the federal government.

Republican proposals are based on taking money from the state tax-filled general fund, which is predicted to have a $1.65 billion surplus in the next two years. Republicans say that taxes have provided the general fund with enough money that transportation can get some of it. They say that means no tax increase is needed.

Democrats like Dayton say that using the general fund siphons money from other projects, such as education and health care, and is not sustainable when the economy turns down. The governor seeks higher gasoline taxes to finance road and bridge needs, saying that is a long-term funding solution.

"We have a plan to spend $6 billion over the next 10 years," said Rep. Paul Torkelson, a Hanska Republican and chairman of the House's Transportation Finance Committee. "We will not be raising the gas tax or other taxes in this bill." The House plan would borrow at least $1.2 billion over the next four years, and redirect to roads and bridges $450 million in auto parts and repair taxes, car rental taxes and lease taxes. It also would enact a new yearly $75 surcharge on electric vehicle owners. The Senate GOP says it would up spending $3.6 billion in the next decade. In the next two years, it would add $400 million from existing car-related sales taxes and $170 million by redirecting existing transportation funding. Senate Republicans also count in the new money—$466 million in federal grants and $300 million the state would borrow.

In the next two-year budget, Dayton's plan would raise $600 million in gas taxes, $125 million in vehicle registration fees and about $400 million in metro-area sales tax increases to fund mass transit. Republicans and Democrats are deeply split on how and whether to fund transit, including trains, buses and bus rapid transit. Democrats tend to support such spending and Republicans tend to be deeply skeptical of the utility of funding transit and limit state spending on it.

Senate Transportation Chairman Scott Newman, R-Hutchinson, said his bill would ban new money for transit, but would "slightly" increase existing funding.

Separate from the overall transportation funding debate, Dayton on Wednesday warned that 30 projects from International Falls to Worthington could be delayed if lawmakers do not approve spending $105 million in federal funds by March 31. The road and bridge work is scattered throughout greater Minnesota.

House legislation to approve spending the federal funds awaits action by the full House, but the Senate version still has at least one committee debate before it reaches the Senate floor.

State Transportation Commissioner Charlie Zelle said that the projects should have been approved in a transportation funding bill last year, but legislators never passed one. If the authorization to spend federal money does not come next week, Zelle said, there will not be time to begin the projects this summer.

"Contractors are asking us when they can get started," he said.

Dayton said that he and his staff have talked to legislative transportation leaders about the situation since last fall, but have not received promises to pass the bill. The governor said that it appears that Senate Republicans, at least, plan to fold the federal money into their overall transportation bill. Dayton said the federal issue needs to be handled in the coming days, while other transportation funding needs more debate.

"Legislation to authorize transportation funding from the federal Fast Act has been passed out of the Transportation Finance Committee and is on the general register due for floor action," Torkelson said. "I look forward to working with the Senate and the governor to secure this critical road funding for Minnesota." Zelle said that if lawmakers do not approve spending the federal money that Washington could send it to other states.

"This is greater Minnesota spending right here," Dayton said.

Rachel E. Stassen-Berger of the St. Paul Pioneer Press, a Forum News Service media partner, contributed to this story.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.
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