The adoption of a new transportation bill means new gas taxes statewide and improved roadways for those living in Southwest.
State House and Senate members voted Feb. 25 to override a veto by Gov. Tim Pawlenty of the $6.6 billion transportation bill, making it law.
As a corollary, Minnesotans can expect to see up to an 8.5-cent increase at the pump by October — and, as a result, better roads and bridges. Minneapolis has 200 miles of state-aid roadways that will receive more restorative treatment in a faster timeframe as a result of the gas tax, said Minneapolis Director of Transportation Planning and Engineering Don Elwood.
No one portion of the city will receive roadwork faster than any other. Instead, city transportation engineers will stick to their five-year capital improvement plan, Elwood said.
The gas tax is made up of a 2-cent increase by April and 3 cents more in October. The money will be put toward improving roads and bridges. The tax also includes up to 3.5 cents more to pay for debt from financing transportation projects, officials said.
“We have not had a gas-tax increase in 20 years and had not had a comprehensive transportation funding bill happen for a very long time,” said state Rep. Frank Hornstein (DFL-60B), who played a large part in the bill’s passage. “Not only are we infusing $6.6 billion over next 10 years, (but also) the way it happened, with the dramatic override few people expected, made it historic.”
The DFL majority Legislature’s override of Pawlenty’s veto was the first of the Republican governor’s tenure.
The passage of the bill more than a month ago signaled increases in license tabs, sales, car rental and vehicle purchase taxes. However, the state Legislature had not increased tab fees since they were slashed while Gov. Jesse Ventura was in office.
Aside from the gas tax — which includes diesel and ethanol increases — the new law includes:
• Provisions for a $25 tax credit for low-income residents to help offset the gas tax (beginning in 2009);
• The addition of 40 state troopers;
• Nearly $25 million for a United Partnership Agreement (UPA) for bus rapid transit lanes throughout the metro; and
• A quarter-cent sales tax increase that would affect taxpayers from seven counties — particularly Hennepin — in the Twin Cities metro.
Hennepin County Board of Commissioners will discuss and decide when this tax would be levied and on whom.
Hornstein said the sales tax would go, in part, toward funding an express bus route from Lakeville to Minneapolis by the end of 2008, and benefit the Central Corridor (Minneapolis to St. Paul) and Southwest (Minneapolis to Eden Prairie) light-rail projects.
“The key thing is … what we were able to accomplish with a one-fourth cent sales tax is we [will be] able to build a system” by 2020, Hornstein said.
The new transportation law has no affect on property taxes, simply out-of-pocket taxes and user registration fees.
However, there would also be a change in the Highway User Tax Distribution fund — which draws from gas taxes, license tab fees and motor vehicle sales taxes. There will be an increase of $1.3 billion for state transportation projects as a result of the reworking of the formula.
“New money will be generated into the fund by the bill,” County Engineer Jim Grube said. “That new money will be split differently … more will be going toward the more urban counties,” such as Hennepin.
Minneapolis roads and bridges will see an increase of about $1 million annually as a result, said Elwood.
“That money will go to the replacement of roads,” Elwood said. “In general, a better transportation network.”
Reach Steve Pease at 436-4373 or [email protected]