Gas tax plan pared to a nickel a gallon

Gas tax plan pared to a nickel a gallon

House and Senate transportation leaders agreed Wednesday on a plan to raise Minnesota’s gas tax a nickel a gallon on Sept. 1.

Supporters said the increase, which would be the first hike since 1988 in the state’s 20-cent-a-gallon gas tax, would pay for needed improvements to the state’s highways, roads and bridges.

But it sets up a likely showdown with Gov. Tim Pawlenty, who has vowed to veto any gas tax increase and would prefer the state pay for road projects by issuing construction bonds.

That means Democrats will have to muster enough Republican votes to override Pawlenty’s veto. Several key Republican supporters of the transportation package said they think they can get the handful of necessary Republican votes.

“The veto is the governor’s promise, but doing something about transportation is my promise,” said Rep. Neil Peterson, R-Bloomington. “There’s a moment at which you stand up and do the right thing, and I think at the last moment we’ll find enough legislators to do the right thing.”

Still, even some Republicans who personally support a gas tax increase said it’s unlikely they’d go against Pawlenty.

“I cannot foresee a situation where enough House Republicans would support overriding the governor,” said Rep. Pat Garofalo, R-Farmington, who voted for a failed 10-cent gas tax increase two years ago. “It’s tantamount to public policy treason.”

With Republicans a minority in both chambers, Garofalo said, Pawlenty is “our only ally” in the legislative process.

Supporters of the transportation plan said they met Pawlenty at least halfway by reducing what had been a 10-cent gas tax increase approved by legislators earlier this year and by agreeing to $1.5 billion in construction bonds — less than what Pawlenty wanted, but more than desired by most Democrats.

“Everybody in this room knows a nickel is not enough,” said Rep. Melissa Hortman, DFL-Brooklyn Park, at the conference committee meeting where the new plan was put forward. “A nickel is not even half enough for all the needs out there. This is a gigantic compromise to the governor.”

To pay the debt on the $1.5 billion in bonds, the state would also place surcharges of up to 2.5 cents a gallon on the gas tax. It would be phased in over several years as the bonds are issued.

The gas tax increase would raise about $160 million a year for roads, which is less than a tenth of the yearly shortfall in the state’s estimated annual transportation needs. In all, the transportation package would funnel $7 billion to road and transit projects over the next decade.

The transportation negotiators also agreed to remove caps of $189 and $99 on vehicle registration renewal taxes, which had been adopted under former Gov. Jesse Ventura.

Even supporters of the House-Senate agreement admitted it’s a politically dicey time to raise the gas tax, with gas prices north of $3 a gallon. “That makes it tough to garner the votes to move it along,” said Sen. Steve Murphy, DFL-Red Wing.

The full House and Senate are likely to vote on the gas tax increase early next week.

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