Minnesota Gov. Dayton Proposes $11 Billion in New Highway, Transit investments

Unveiling a 10-year plan to increase spending on roads, bridges, transit systems and alternative transportation, Minnesota Gov. Mark Dayton proposed raising nearly $11 billion through a combination of fuel taxes, fee increases, bonds and a targeted-area sales tax hike.

  Gov. Dayton                                       Photo/Office of Governor Mark Dayton

The proposal Dayton put before the state Legislature includes a 6.5 percent wholesale tax on motor fuels on top of existing per-gallon excise taxes. It would generate about $5.4 billion for the Minnesota “trunk highway system” and $2.4 billion for cities and counties to spend on roads and bridges, plus nearly $3 billion for transit and $75 million bicycle and pedestrian routes.

A fact sheet issued by the governor’s office said the plan would improve 2,200 miles of pavement on state highways, repair or replace 330 more highway bridges and target $1.6 billion for improvements in “corridors of commerce” freight routes considered important for business expansion and economic development. The amounts aimed for local government in the plan would increase their road funding from the state by nearly 30 percent, it said.

“Inadequate transportation clogs our lives with worse traffic congestion, longer commutes, more dangerous travel conditions,” Dayton said in a statement announcing the plan. “Those deficiencies restrict our future economic growth and detract from our quality of life. If we continue to avoid these problems, they will only get worse. It’s time to begin to solve them.”

The revenue mix includes $4.4 billion from that “gross receipts tax” on fuel for state and local roads, plus $1.45 billion in higher vehicle registration fees and taxes, and $2 billion in bonds for the state system. And Dayton’s office said his plan would also require the state Department of Transportation “to generate efficiencies of 15 percent from all new revenues, allowing the department to do $6 billion of work for $5.38 billion in new funding.”

The transit revenue would mostly come from a half-cent sales tax for the Twin Cities metro area covering greater Minneapolis and St. Paul.

Minnesota Transportation Commissioner Charles Zelle said: “The state’s foremost experts agree on two things: this problem is real, and it cannot be resolved without a major investment.

“But Minnesotans didn’t need a bipartisan panel of experts to tell them what they already know – that our transportation system is in serious disrepair, and getting worse,” Zelle continued. “This problem presents us with two simple and starkly different options: Invest for the future, or do nothing and let the problem get much worse. We choose to invest.”

Several news reports on the plan highlighted Dayton’s percentage fuel tax proposal, which would add 16 cents a gallon when wholesale prices are $2.50 or lower.

In another fact sheet, the governor’s office said the plan’s revenue features would cost average residents outside the Twin Cities metro area about $15 a month or 45 cents a day, but noted “in contrast, the average cost to repair a bent rim and get your tires realigned is $200.” Metro area residents would pay $24.50 a month more or 80 cents a day, but the fact sheet said “the average cost to replace four tires is $400.”

A blog posting from Dayton’s office said the transportation proposal “would create an estimated 119,000 new jobs, and build the infrastructure necessary to meet the demands of a growing population and an expanding state economy.”