Minnesota plan would more than double fuel tax

By Keith Goble, Land Line state legislative editor | 12/4/2012

In an effort to boost revenue to pay for transportation work in Minnesota higher fuel taxes and vehicle fees are expected to be considered at the statehouse in the months ahead.

A transportation group created by Gov. Mark Dayton unveiled recommendations to help address a $50 billion shortfall for roads, bridges and transit during the next two decades. It will be up to state lawmakers to decide which revenue-generating methods to pursue during the regular session beginning Jan. 8.

Specifically, the 19-member Transportation Finance Advisory Committee has offered two methods to raise $15 billion over 20 years through higher fuel taxes. Minnesota now collects 28.5 cents per gallon on fuel purchases.

One proposal would increase the tax rate by 10 cents per gallon to 38.5 cents in the first year. Each year thereafter an increase of about 1.5 cents would be included.

If approved, the state’s tax rate would reach 67 cents per gallon in 2033.

The second option calls for a 3.5-cent-per-gallon increase each year for five years. By 2018, fuel increases would be 1.5 cents per gallon annually until the tax rate reaches 68.5 cents in 2033.

The Owner-Operator Independent Drivers Association remains committed to the fuel tax as the primary way to fund highways.

Ryan Bowley, OOIDA’s director of legislative affairs, said the fuel tax is historically the best option to address funding needs.

“The fuel tax has been shown time and again to be the most efficient system to pay for highway maintenance and improvements based on its low cost of collection,” Bowley said.

Also included in the panel’s recommendations is a proposal to increase vehicle registration fees by 10 percent. The increase is estimated to raise $1.1 billion over the next decade.

Another recommendation calls for increasing a transit-related sales tax in five Twin Cities’ counties by a half-cent. The change would raise another $200 million annually for area transit.

Supporters say all the changes would provide a more stable funding source for transportation. They say it would also help address increasing congestion concerns.

Editor’s Note: Please share your thoughts with us about the story topic. Comments may be sent to state_legislative_editor@ooida.com.

Additional coverage of states looking at possible fuel tax increases:

Wisconsin panel pursues fuel tax, truck fee increases
Could Virginia be on verge of a fuel tax increase?
Wyoming truckers, others could soon chip in more for roads

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