Issue Position: Transit

Issue Position

The Future of Transportation Funding in Minnesota

I believe in implementing a fuel based wholesale tax, dedicated to funding statewide transportation needs. And that new revenue needs to be spent across our state, both metro and greater Minnesota. In addition, Minnesota needs to partner with municipalities and counties to bolster funding for municipal state aid street funding (MSAS) and county state aid highway (CSAH) funding. We all see the need living in Duluth for infrastructure improvements, and that story is the same statewide.

Transportation funding, or the lack thereof, is a constant debate within the legislature. We argue about a dedicated funding source vs. shifting money from the general fund. We argue about a fuel tax vs. a wholesale tax. We argue about splitting funding between the metro and greater Minnesota. And we argue about the need for transit systems statewide. During all these arguments, our state roads and bridge systems are failing. MN Dot estimates that we should invest nearly $1.5 billion dollars per year over the next 20 years in order to just fund road and bridge repairs and maintenance. Politicians are often afraid to consider new taxes to pay for our future. I am not afraid to do the right thing for Minnesota.

The Republican Party would like to continue with a Band-Aid approach to funding. They are advocating to spend one time monies that are available in the state budget surplus. That's also known as kicking the can down the road. In addition, they want to pull money from the general fund and dedicate it to transportation infrastructure. That may seem like a good plan, but remember, that leaves holes elsewhere in the state budget, in areas like health and human services, education funding, public safety or other important areas. They also believe that "efficiencies" can be found in the existing MN DOT budget. That is simply not true. Right here in Duluth and our surrounding district, cuts after cuts have been made resulting in reduced services we all notice. We cannot possibly take more away from an already underfunded agency.

I also believe in investing in transit programs. Whether it is trains in the metro, or bussing in greater Minnesota, people have transit needs. We can and should do a better job at funding and maintaining transit options.

1. Dedicated Funding Source

In FY 2015, Minnesota state fuel taxes generated approximately $890 million dollars. If we want to invest another $1 billion dollars a year into transportation, I am in full support of the funding mechanism that was actually passed by the Minnesota Senate and denied by House Republicans. The gross receipts tax on gas would come on top of the state's existing fuel tax of 28.5 cents per gallon. The new receipts tax, first proposed by Governor Dayton, would charge an additional 16 cents per gallon until pump prices hit $2.50 per gallon. Should gas rise above that level, the receipts tax would become 6.5 percent of the overall price at the pump. The percentage would be set yearly, after averaging the previous years per gallon price. So at $3 a gallon, the wholesale tax would be 19.5 cents. At $4 a gallon, it would jump to 26 cents a gallon. With this in place, Minnesota would be well on its way to solving a major problem, and creating a significant number of jobs in the process.

I also support a metro area sales tax increase dedicated to funding transit mechanisms there. The metro area has a major problem with congestion, and the reality is transit provides relief to that congestion, both in terms of traffic and parking.

We also have a huge opportunity to save significant money over the next several years. Minnesota's Border to Border Broadband Grant Program is receiving more and more attention, and I envision requiring fiber to be laid with each and every road project funded with state dollars. We must work toward an interconnected state, where everyone has access to adequate internet capabilities.

2. Partnering with Local Governments

Over the years, the state has been back and forth with respect to its partnering with local governments. Aids to local governments are still at 2002 funding levels, in spite of improvements and increases we made in 2013. The state can do better, and we should do better, not just in LGA or CPA, but in street aids as well. The very best way for the state to invest in direct property tax relief for homeowners, is to continue effective financial partnerships with local governments. The reality is, transportation is enjoyed and appreciated and relied on by all, not just the local property taxpayers. It makes far more sense that more of these investments are spread across a greater base, and I fully support increasing these aids to local governments.

In addition, we need to re-visit the policy on allowing municipalities to create street improvement districts. I voted for it once, and I believe it is effective policy, and another tool for local governments to consider. Costs of street improvements not covered by other sources often rely on adjacent property owners, and these assessments can be incredibly costly. There are less intrusive ways to fund local street improvement projects, and this is a top priority for me as we go forward.

3. Transit Funding

A ½ cent sales tax increase in the 7 county metro area would generate $2.8 billion dollars in new revenue over the next ten years, dedicated to metro transit. The population in the metro is expected to increase by 800,000 people by 2040, and Minnesota needs to be prepared to handle that if we want our economy to continue to grow.

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