Transportation bill calls for increased funding, some additional taxes

An extensive package of infrastructure investments, policy provisions, and some tax increases that have already proven controversial, form the omnibus transportation finance bill, which was introduced on Tuesday as a delete-all amendment to HF1684.

Sponsored by Rep. Frank Hornstein (DFL-Mpls), the bill is due to take its final shape and receive an up-or-down vote tomorrow by the House Transportation Finance and Policy Committee, but members continued their work during another meeting Wednesday.

A companion, SF1159, is sponsored by Sen. Scott Newman (R-Hutchinson), and awaits action by the Senate Transportation Finance and Policy Committee.

The largest agency appropriations for the 2022-23 biennium in the House bill are $6.25 billion to the Department of Transportation; $491.39 million to the Department of Public Safety; and $178.81 million to the Metropolitan Council.

There is also $400 million in trunk highway bonding proposed in fiscal year 2024, of which $225 million would go to state road construction and $175 million to the Corridors of Commerce program.

The bill would result in a $39.6 million increase in General Fund spending over the current base level.

Hornstein said this year’s omnibus transportation bill needs to address four major areas:

• safety;
• economic development and pandemic recovery;
• racial equity and economic inclusion; and
• climate change.

He believes progress is made in each and said, despite his support for “a steep increase in gas taxes,” that is not included in the bill, though there is an “inflation adjustment.”

Nor is there an attempt to “claw back” General Fund money previously appropriated to the Highway User Tax Distribution Fund.

“I understand those are two issues of great concern to the other side of the aisle, and that’s why they’re not in here,” Hornstein said during Tuesday’s hearing. “I hope the other side can reach out to us and accept some of the things you may have a problem with so we can move forward.”

The bill would raise some tax rates, including the adjustment Hornstein referenced. That proposal would direct the Department of Revenue to index the motor fuels tax to inflation using the National Highway Construction Cost Index, a change estimated to add 1.2 cents to the cost of a gallon of gas each of the next two years.

Another provision would add a 4% “luxury vehicle surcharge” to the motor vehicle sales tax. It would only be levied if the sales price is more the double the annual average sales price of vehicles in three different classifications: automobiles, non-commercial 1-ton pickup trucks and recreational vehicles.

A 0.5% increase to the transit sales tax in the Twin Cities metropolitan area is also proposed. All told, it is estimated the bill would raise more than $627 million during the biennium.

[MORE: View the spreadsheet and tax proposals]

In a statement, Rep. John Petersburg (R-Waseca) said Minnesota currently enjoys a $4.2 billion budget surplus and there is no reason to “waste our time” on tax increase proposals.

“Instead we should be leveraging and prioritizing the surplus dollars and future federal dollars in providing improvements to our transportation infrastructure,” Petersburg said.

Another provision would allow people without proof of legal presence in the U.S. to obtain a driver’s license or Minnesota identification card, a controversial change supporters say would allow more Minnesotans to drive legally, buy auto insurance and get to and from work more easily, but opponents say would incentivize more illegal immigration.

Some of the bill’s highest profile funding proposals include:

• $6.2 million for a grant to ReConnect Rondo to develop the project that would create a land bridge over Interstate 94 in St. Paul from Lexington Avenue to Rice Street;
• $2.5 million for design and construction to provide a second daily Amtrak train running between the Twin Cities and Chicago; and
• $2.5 million for the Safe Routes to School program .

Some of the bill’s policy proposals include:

• establishing a statewide goal to reduce vehicle miles driven by 20% by the year 2050;
• requiring the Metropolitan Council to work with the Pollution Control Agency in deploying low-emissions buses to areas with poor air quality;
• requiring the council to plan for a goal of having its entire transit fleet using zero-emissions vehicles by 2040;
• directing development of a pilot program to increase work zone safety using automated traffic enforcement systems;
• reestablishing the active transportation advisory committee;
• establishing self-service kiosks that can be used to renew vehicle registrations;
• ending driver’s license suspensions for a number of different violations, including unpaid traffic tickets, and reducing barriers to license reinstatement;
• requiring motorists to maintain a clearance of at least 3 feet, or half of the passing vehicle’s width, whichever is greater, when passing a bicyclist;
• modifying several electric-assisted bicycle regulations and definitions, including creation of three classes of e-bikes based on speed, a reduction in their maximum power capability from 1,000 to 750 watts; generally allowing their use on roads and trails where nonmotorized bicycles are permitted; and setting equipment requirements that include manufacturer labeling, and a speedometer for class 3 e-bikes;
• requiring audible signaling when passing an individual or another bicycle on a bicycle lane or path;
• establishing that bicycle lanes are part of the roadway – the main traveled portion of a road – and not the shoulder;
• authorizing the issuance of several new types of license plates; and
• eliminating a requirement that a county highway engineer be a Minnesota citizen and resident.

What’s in the bill?

The following are some bills that have been partially or fully incorporated into the omnibus transportation finance bill:

• HF29 (Hansen)
• HF31 (Elkins)
• HF32 (Elkins)
• HF64 (Klevorn)
• HF103 (Davnie)
• HF272 (Elkins)
• HF336 (Becker-Finn)
• HF381 (Sundin)
• HF482 (Petersburg)
• HF489 (Koegel)
• HF537 (Burkel)
• HF602 (Jordan)
• HF638 (Koegel)
• HF646 (Lee)
• HF749 (Burkel)
• HF779 (Frederick)
• HF782 (Frederick)
• HF964 (Hornstein)
• HF1058 (Burkel)
• HF1027 (Hornstein)
• HF1163 (Winkler)
• HF1204 (Wolgamott)
• HF1232 (Petersburg)
• HF1306 (Elkins)
• HF1318 (Hansen)
• HF1379 (Koegel)
• HF1566 (Bernardy)
• HF1637 (Hausman)
• HF1675 (Huot)
• HF1683 (Hornstein)
• HF1684 (Hornstein)
• HF1692 (Petersburg)
• HF1713 (West)
• HF1788 (Bernardy)
• HF1809 (Frederick)
• HF1827 (Kiel)
• HF1894 (Sandstede)
• HF1908 (Lillie)
• HF2126 (Xiong, T.)
• HF2169 (Richardson)
• HF2196 (Hollins)
• HF2213 (Hornstein)
• HF2295 (Bernardy)
• HF2337 (Hornstein)