2015 Minnesota Legislative Session Update

Jim Wafler, Consultant

With just over six weeks to go in the 2015 session of the Minnesota Legislature (the required adjournment date is May 18),  on the transportation finance front, the future looks rather bleak right now.

Both the DFL-controlled state Senate and the Republican-controlled state House have now officially unveiled their omnibus transportation proposals. The Senate bill (S.F. 87) to a large extent mirrors the Governor’s initial ten-year proposal: (a) a 6.5% gross receipts tax on wholesale fuel, directing $1 billion over 4 years to the Transportation Economic Development and Corridors of Commerce programs of MnDOT; (b) the metro transit sales tax would be increased by .75% and apply to all metro counties; (c) tab fees 1.25% base tax would be increased to 1.5%, and there would be a slight increase in minimum fee for older cars. Annual new revenues would be almost $800 million, and a large share of it would go to roads and bridges; in addition the Senate proposes General Obligation bonds of $567 million for local roads and bridges.

The House Republican plan proposes a ten-year $7 billion transportation funding plan that would be funded without any revenue increases. The plan shifts several revenue streams currently deposited in the General Fund and proposes to dedicate them to roads and bridges, including the auto parts sales tax and other vehicle sales taxes ($3 billion in total), which would be an on-going revenue stream (unless the legislature decides to do something else with the money). The plan also directs MnDOT to spend down any Trunk Highway Fund balances, generating an additional half billion dollars (not new money), and borrows over $2.3 billion (both Trunk Highway and General Obligation bonds) evidently taking General Fund dollars to pay for THF bonds and providing no debt service on G.O. bonds which go for local roads and bridges. The House bill does not address transit funding, cuts the Metro Council budget by around $150 million per biennium into the future, and basically ignores rail funding of any kind.

These two omnibus proposals are radically different, and with the two sides so very far apart, it is difficult to see how a compromise can be reached. Republicans have become so entrenched with the “no new taxes” philosophy that is difficult to see how a conference committee can expect to achieve some sort of compromise. With gas prices still at very low levels, this may be the only opportunity to get new revenue. Time will tell.

There has also been some activity on the truck weight bill. HF 620 (Dennis McNamara) was heard for a second time; it is expected to be included in the House omnibus transportation funding bill. The bill has now been amended to apply specifically to certain agricultural commodities and to highway/building construction materials; it no longer would apply to all freight, thus considerably narrowing the scope of the bill. We were ready to offer the same amendment to SF 309 (Vicki Jensen) when Senate Transportation put together its Omnibus Transportation Policy Bill a week ago, but it was decided to wait to offer the amendment when the Senate Finance Committee takes up transportation bills in the next couple weeks. Despite lots of opposition testimony, it appears the amendment has a good chance in the House and an even chance in the Senate, where Senate Transportation Committee Chair Scott Dibble informed Ms. Jensen that he supports her amendment.

Finally, there will be a Transportation Funding Rally on Thursday, April 16 from noon to 1 p.m. on the south end of the Capitol lawn where all transportation advocates will be gathering to promote a major transportation funding bill. Move Minnesota, the coalition which MAPA is affiliated with, is coordinating the Rally. It is important that MAPA members come and show their support. We expect excellent media coverage for this event.

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