Dayton proposes higher taxes on gas, fees on car registration to tackle transportation backlog

Industrials Associated Press

Gov. Mark Dayton unveiled a plan Monday that would resurface or replace 2,200 miles of roadway, repair 330 bridges and boost funding for local infrastructure projects — but would come at a noticeable cost to taxpayers.

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His proposal would add a new 6.5 percent tax on gas at the wholesale level and hike license tab fees, with a separate sales tax increase in the Twin Cities, mostly for increased bus services. Those changes, state officials estimated, would add about $15 in costs to residents in greater Minnesota. In the seven-county metro area, it could mean an extra $25 a month.

The plan is Dayton's attempt at fixing the state's ailing network of roads, bridges and highways. While Dayton said he didn't relish the thought of raising taxes — noting it may be a political risk for some state lawmakers — he said he sees no alternative to generate the revenue needed to tackle what he sees as an urgent problem.

"It's the one guarantee I can make: If we do nothing more, conditions will continue to get worse," the Democrat said.

Dayton and top lawmakers in both chambers have named transportation as among their top priorities this year.

But while the governor said the time to step in is now, the top Republican overseeing transportation issues in the House urged the need for caution before enacting a long-term funding mechanism. And it may not be this year, said Rep. Tim Kelly, R-Red Wing.

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At the heart of their dispute is a disagreement about how large the problem is. Dayton's administration pegs it at $6 billion over the next decade, citing a report from a group of transportation experts and politicians. Kelly declined to put a number on it, though more conservative estimates have put the needs around $2 billion.

"I think it's irresponsible to create a long-term plan if we don't understand and agree what the need is," Kelly said Monday after the governor's plan was released.

Republican in control of the House have signaled a resistance to raising taxes to pay for road and bridge repairs, opting instead for a $750 million infusion over the next four years. GOP lawmakers' proposal would transfer $200 million of the state's projected $1 billion surplus for road repairs, require state transportation officials to spend nearly all of a special fund, and find budgetary savings that would be used for roads and highways.

Dayton called those suggestions "pure fiction" but also said a smaller fix would be better than nothing.

State lawmakers have pursued a long-term transportation package for years. The last large-scale transportation plan was passed in 2008, when Republicans joined Democrats in overriding a veto by GOP Gov. Tim Pawlenty.

Dayton and Kelly agreed the key to bridging the divide between Democrats' and Republicans' proposals is to nail down how large a bill the state may be facing.

"The sooner we can all get on the same page and reach agreement of what that number is, the quicker we can get to solving the problem," Kelly said. "It starts today."