Governor Dayton (DFL) along with Lieutenant Governor Tina Smith (DFL) announced two new proposals for transportation funding.
In the past few weeks the House, Senate, and the Governor’s administration have been going back and forth trying to find an amicable solution for funding a transportation bill. With a week left in the session, House Speaker Kurt Daudt (R- Crown), Senate Majority Leader Tom Bakk (DFL- Cook), and Governor Dayton have agreed that the bill should provide $600M for transportation projects every year.
Option one would call for $100M to be attributed from the general fund in 2017, with $200M being attributed to transportation for the nine years afterwards. There would be a price increase in vehicle tabs. This would be the first time that vehicle tab prices have risen since Governor Jesse Ventura (I) took office in 1999, when he capped vehicle tab renewal prices at $75. There would also be a 0.5 cent increase in the metro area sales tax for transit. Governor Dayton stated that while raising the price of vehicle tabs might be unpopular with average Minnesotans, “there is no such thing as a free lunch.” He added that Minnesota was paying for years of neglect.
Option two would also take $100M in 2017 from the general fund in 2017 and $200M for the following nine years. There would be no gas tax, but a greater increase in vehicle tabs. The first option generated $250M from vehicle tabs, but option two would generate $400M or about 25% more than option one. The sales tax increase in the metro would remain the same.
Overall the Governor hopes to generate $600M for roads and bridges and $280M for transit every year for the next decade. Governor Dayton said that while he was willing to listen to other options that either the House and Senate could present, he would not compromise on the $600M price tag. Governor Dayton was adamant that if this demand was not met, then there would be no transportation bill.
The Governor was quick to criticize the proposal by House Republicans. He claimed that the proposal was not real money and did not add up as it double counts money that MNDOT already had in its operating budget and counts the general obligation bonding that was a one-time fund that could not be counted on. Governor Dayton said he wanted to see a plan from House Republicans that used “real and sustainable money.”
Lieutenant Governor Tina Smith said that a potential consequence of not passing this bill would mean that approximately $900M of Federal Aid meant for transportation would leave the state. Governor Dayton also stated that maintenance of the state’s current transportation infrastructure was currently under-funded by $400M. As a result, infrastructure would continue to get worse and deteriorate. If the bill was rejected, future projects in place around the state would be put on hold.
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