Minnesota bill allows voters to secure transportation money

April 17, 2018

Keith Goble


Funding needed to help cover costs for transportation work in Minnesota could get a shot in the arm during the fall election.

The Senate Transportation Finance and Policy Committee voted 8-7 to advance a bill to earmark vehicle-related sales tax for state and local roads and bridges. Everything from oil changes to vehicle rentals would be covered.

Fuel tax revenue already are dedicated to transportation.

Sponsored by the committee’s chairman, Sen. Scott Newman, R-Hutchinson, the bill calls for asking voters whether to protect the sales tax revenue from possible diversions via an amendment to the state’s constitution. The change is intended to make sure the more than $250 million annually collected from vehicle-related sales taxes is safeguarded.

No new taxes would be collected.

Committee members were told that $145 million from vehicle-related sales taxes out of the possible quarter-million dollars is slated to be used for road and bridge work by fiscal year 2020. The rest of the tax revenue is set to be applied for general purposes.

Advocates say the bill would help address funding needs without relying on tax and fee increases. They point out that less than 1 percent of the state’s operating budget is reserved for transportation infrastructure.

Sen. David Senjem, R-Rochester, said during committee discussion the bill gives the state a path forward to address transportation needs.

“We could all come back here in 25 years. I don’t think we are going to have a transportation system that relies on the gas tax,” Senjem said. “I think it’s going to be some form of this sales tax. … The discussion today is a pathway to our future.”

Critics say making money available solely for transportation work could have a negative impact on other budgets, including education and health and human services.

The bill, SF3837, awaits further consideration in the Senate Rules and Administration Committee. If approved there, it would head to the Senate floor.

Clearance in both chambers of the statehouse would greenlight the effort to head to voters with the question in November. Gov. Mark Dayton would not get a say.

To view other legislative activities of interest for Minnesota, click here.