Minnesota bill calls for tax increases to fund transportation

| 1/17/2007

A transportation funding package has been offered in the Minnesota Senate to help pay for road and transit work. The effort includes a proposed 50-percent increase in the state's fuel tax.

Sponsored by Senate Transportation Committee Chairman Steve Murphy, DFL-Red Wing, the bill would generate up to $850 million annually in new revenue.

A spokesman for Republican Gov. Tim Pawlenty has referred to the effort as "veto bait," the Minneapolis Star Tribune reported. Supporters say it is necessary to trim the more than $2 billion annual funding gap for transportation.

The bill includes a provision to increase the state's 20-cent-per-gallon tax on diesel and gasoline by 10 cents. It also would increase registration fees on new vehicles and authorize counties to impose a half-cent sales tax boost, as well as implement a statewide wheelage tax, which would allow counties to charge up to $20 annually for each vehicle.

Brain McClung, a spokesman for Pawlenty, told the Star Tribune the governor's position on tax increases is unchanged since his veto of a similar effort in 2005. McClung said the governor is working on his own plan for transportation.

Facing expected opposition from the governor, Murphy said his bill could be trimmed back for the sake of compromise.

The bill - SF5 - is in the Senate Transportation Committee. The House version - HF23 - is in the House Finance Committee.