Tax, fee increases sent to North Dakota governor

| Tuesday, May 10, 2005

Lawmakers in North Dakota have approved a budget plan to pay for roadwork. It now moves to Gov. John Hoeven for approval.

The measure would raise the state’s tax on diesel and gasoline from 21 cents to 23 cents a gallon. It also includes a provision to increase motor vehicle registration rates by $10.

Registration fee amounts depend on a vehicle’s age and weight.

The plan is part of the state Transportation Department’s budget bill, one of the last measures tackled as lawmakers wrapped up their work for the year. It includes $953.6 million in total spending.

The tax and fee increases are expected to raise $28.6 million for construction and repairs of state highways over the next two years, and almost $9 million for cities and counties, the Grand Forks Herald reported.

It also limits use of grant-anticipated revenue vehicle bonds – commonly known as GARVEE bonds – to pay for roadwork.

The special class of bonds may be used only to finance the replacement of a bridge across the Missouri River at Bismarck, and for continued four-lane construction on U.S. 2.

The funding program allows the state to borrow money against the federal transportation dollars that come each year to pay for construction. The sale is based on the assumption that federal funding in future years would pay off the bonds. This allows the state to get money needed for the project up front.

House lawmakers voted 66-27 to approve the bill – SB2012 – about two hours after senators voted 31-14 in favor of the bill.

House and Senate negotiators had been going back and forth over the transportation budget for about two weeks, looking for ways to raise enough state money to get the maximum share of federal highway aid, the newspaper reported.

If signed by the governor, the proposals would take effect July 1.

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