Most of you have heard that Minnesota is projected to have a budget surplus in the general fund, but highway funding relies on Minnesota’s Highway Trust Fund. Fees like the fuel tax and license tab fees are constitutionally dedicated which ensures that those dollars can only be used to fund roads and bridges. Unfortunately, we don’t have enough money in the Highway Trust Fund to pay for all the needed road, bridge, and highway upgrades and repairs. This has forced many important roadway and bridge projects to wait years for desperately needed safety and efficiency improvements.
The Minnesota legislature has been unable to strike a long-term transportation funding agreement in recent years. Although there are persuasive ideas from both political parties regarding the best way to pay for infrastructure investments, everyone agrees that Minnesota is facing a $6 billion transportation deficit, meaning we need to find long-term and viable solutions to fix the problem today and into the future.
To do nothing this year will just exasperate the problem and make it even more difficult to meet pressing needs. Minnesota must act now to not only close the current multibillion-dollar funding gap but also to find solutions to meet our more than $20 billion in transportation needs over the next 20 years.
There is growing support for an increase to the gas tax to supplement funding for roads and bridges. Minnesota’s gas tax is currently 28.5 cents per gallon, which is almost exactly the national average. Minnesotans pay 47 cents per gallon in state and federal taxes combined, according to the U.S. Energy Information Administration, but our gas tax has not kept up with inflation. I believe Minnesota residents are open to an honest discussion on this issue and most are willing to pay their fair share of taxes, provided they have assurances the funds will be spent wisely.
Minnesota hasn’t raised the gas tax since 2008 which was a year after the Interstate 35W bridge in Minneapolis collapsed. That year, the legislature passed a plan to gradually raise the gas tax from 20 cents a gallon to the current 28.6 cents. In 1975, Minnesota’s gas tax was 9 cents per gallon. If that were adjusted for inflation, today Minnesota would have a gas tax of about 42 cents per gallon. Our gas tax revenue is expected to fall even more as motor vehicles become more fuel efficient. Studies indicate that by 2040 more than half of all new car sales will be electric.
It’s likely that additional funding sources will be brought forward for consideration, including an increase to the vehicle registration tax, local option sales taxes, a fee structure for electric vehicles that share our roads, and investing more in our corridors of commerce. Those ideas, in addition to a gas tax, need to be on the table if we are going to find a bipartisan compromise on a solution to fix our growing transportation deficit.
Please reach out to me with your comments and suggestions on this issue and any others that I may be able to help you with. I can be reached by phone at 651-296-4120 or by email at email@example.com. You can also mail letters or pay me a visit in the Minnesota Senate Building, Room 2233, right across the street from the Capitol.