Real ID

Minnesota has yet to allow the Department of Public Safety (DPS) to implement REAL ID standards for our driver’s licenses. According to the Federal Department of Homeland Security, Minnesotans will need a REAL ID compliant driver’s license, unless they have other acceptable forms of identification, by January 2018 in order to board a domestic commercial airplane. Although, people are already having difficulty entering military bases with their Minnesota driver’s licenses.

According to recent news reports the House and Senate Republicans have differing opinions on the urgency of this issue. Sen. Limmer does not feel any rush to implement the REAL ID law because he believes the Trump administration may extend the deadline again. Limmer also remains concerned about the amount of data the government will be collecting. Rep. Smith, the House REAL ID author, is worried about the upcoming deadline and wants to pass the implementation bill during the 2017 session. He worries about the effects that not implementing the licensing standards would have on commerce and the ability of people to travel by plane.

In 2016, the Senate passed a REAL ID implementation bill with bipartisan support by a wide margin. The bill ultimately failed during conference committee largely because the House bill specifically barred undocumented immigrants from obtaining the second-tier driving-only licenses. The Senate bill upheld current law, which also does not allow undocumented immigrants to obtain driver’s licenses. There were fears from some that without the specific language barring undocumented immigrants from obtaining driver’s licenses, a Governor’s administration could allow it without legislation. The Dayton administration does not believe it has or would have this authority. Further adding the undocumented driver’s license prohibition unnecessarily adds another layer of controversy to this already contentious issue.

  • The DFL passed a REAL ID implementation bill that protected people’s privacy concerns while also giving the public the ability to continue traveling without additional documentation.
  • The DFL left controversial issues such as undocumented immigrant driver’s licenses out of its implementation bill and prioritized ensuring Minnesotans could freely travel and do business around the country.

Transportation Funding Proposal

The House, the Senate, and the Governor all said a transportation funding proposal would be a top issue for them last biennium. Unfortunately, the Legislature failed to pass a comprehensive funding proposal. The plans that passed the Senate and the House were vastly different approaches on how to fund roads and bridges and whether to increase funding for transit. The GOP plan relied on shifting sales tax revenue, making cuts to transit funding, and borrowing to fill the growing transportation funding gap, whereas the Senate plan increased revenues to invest in Minnesota’s transportation system now and over the long term.

It seems like the likely path forward for the Republicans will be a similar proposal to the House plan from last biennium. The Senate Majority Leadership-elect and the Speaker indicated at a pre-session briefing that a transportation bill will not include a gas tax, likely will use existing general funds, and potentially include “reasonable” transit funding.

The DFL prioritized this issue by:

  • Passing two comprehensive funding bills over the last two biennia that raised enough revenue to fix Minnesota’s roads and bridges and improve transit services around the state.
  • Passing funding proposals that paid for transportation projects over the long-term without shifting money away from our E-12 system or our most vulnerable Minnesotans.

Removing State Funding for Light Rail Projects

The GOP may author bills to stop the expansion of light rail in the Metro. They may attempt to make it more difficult or impossible for state funds to be used on light rail construction or its operations. Additionally, taking state funds out of the picture combined with a county regional rail road authorities’ inability to fund more than 10 percent of a project’s capital costs could restrict future light rail projects. As part of the bonding bill that the Senate passed, there was a provision allowing county regional rail authorities to fund up to 20% of light rail projects. This change essentially took most of the state’s money out of the equation.

  • The DFL has supported expanding our transit systems whether by rail or bus because these systems ensure that students can get to school, seniors can get to medical appointments, and all Minnesotans can remain active in our communities.
  • The DFL also supported giving local control for funding LRT projects, taking the state’s funding share out of the equation.
    • This was ignored by the House GOP, and failed as part of the bonding bill.

Metro Transit Funding Gap

The Met Council is facing a funding gap over the next two years of around $89 million. The main causes behind the funding gap are a projected decline in motor vehicle sales tax revenue, increased use of Metro Mobility, inflationary pressures, and the cost of potentially using certificates of participation to fund SWLRT. This funding gap could renew Republican interest in raising the price to ride Metro transit buses and trains. The rate was most recently raised in 2008. The gap could also prompt calls to reduce transit service, despite growing demand.

  • The DFL Senate passed two comprehensive transportation funding bills over the last four years with an increase in the seven-county metro transit tax. This tax revenue would have funded Metro transit operations and expansion for years to come.
    • A half-cent seven-county transit sales tax would raise around $280 million and eliminate the funding gap.

Car2Go and rental taxes

This fall, Car2Go – a short-term car rental company operating in Minneapolis and St. Paul – announced it was leaving the market, largely due to Minnesota’s high rental-car taxes. There has been some interest in changing the statute related to these types of vehicles to improve transit options in the core cities.

Short-term motor vehicle rentals are defined in statute as a lease or rental of no more than 28 days. The combined sales tax rate for these vehicles is at least 21.075%: they are subject to the state’s general 6.875% sales tax, a 9.2% “rental” tax, and a 5% fee. The rentals also are subject to any local sales taxes in effect within the rental jurisdiction. Of these taxes, only 16.075% of this is paid to the state. The 5% fee is retained by the rental companies to offset payments of motor vehicle registrations, and local sales taxes are retained by the local governments.

Current law provides an exemption from the 5% motor vehicle rental fee (but not the 9.2% rental tax or applicable local taxes) for certain nonprofit car-sharing entities whose members pay the organization for the use of a motor vehicle, if the organization meets certain conditions. There may be an effort to expand the current exemption to include Car2Go, which is not a nonprofit. The cost would have a large effect on whether Republicans would support the change.

Senate DFL Media