A number of new laws take effect in Minnesota on July 1, coinciding with the start of the new fiscal year. The 2023 legislative session ended in late May with the DFL trifecta putting into law nearly $10 billion in tax increases.
Of that total, Minnesotans are set to face $3.8 billion in transportation tax hikes alone. Some of these tax increases are set to take effect as of July 1. At a time when residents are struggling to pay the bills and state government had a $17.5 billion state budget surplus, the majority was unable to curb its appetite for more taxes, raising transportation-related taxes by billions and wasting more of your money on the Met Council’s transit boondoggles (more on the latter in a minute).
Here are some of the new transportation-related expenses to note:
- Vehicle registration tax/tabs: This tax hike averages to be a 36% increase over the first 11 years of your new vehicle. The change will apply to taxes payable for a registration period starting on or after January 1, 2024.
- Filing fee increases: Filing fees will increase to $8 on every vehicle registration renewal, excluding pro rate transactions. This section is effective October 1, 2023.
- 50-cent delivery fee on retail deliveries over $100: Over $189 million over four years is expected to be leveled on residents who shop from home thanks to this tax. The fee will be implemented on deliveries over $100. Exemptions include deliveries for groceries, prepared food, baby products, and feminine hygiene products. The tax would begin on July 1, 2024, and is the largest delivery tax in the U.S.
- $6 Fee increase for driver licenses: This is effective July 1, 2023, and applies to applications made on or after that date.
- Gas tax – automatic Increases for inflation: The expected gas tax hike beginning January 1, 2024 is 5 cents over four years. Drivers will pay $423 million over four years for this Democrat priority.
- Metro sales tax changes: This 0.75% increase in the 7 county Metro Sales Tax for Transportation will see 83% of funds go toward Metro Transit funding and 17% will be sent to Metro Counties for local road projects. This section is effective for sales and purchases made on or after October 1, 2023, and applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
- Increase in motor vehicle sales tax from 6.5% to 6.875%: Will give Minnesota the 5th highest Vehicle sales tax rate in the U.S. This section is effective for sales and purchases made on or after July 1, 2023.
These transportation tax hikes were unnecessary and add to the burden Minnesota families already face with higher costs on pretty much everything in today’s economy. Democrats did not need to raise taxes when we had a record surplus, and it is disappointing more wasn’t done to provide relief for Minnesotans instead of adding to their challenges.
Click here for more details on all the laws that take effect July 1.
Light rail report
We received information in mid-March indicating the Southwest Light Rail project is $1.5 billion over budget and nearly a decade behind schedule. This week, the Office of the Legislative Auditor issued a new report showing that “the Metropolitan Council has not adequately enforced several aspects of its key Southwest Light Rail Transit construction contracts, nor does it have adequate documentation to support some project decisions.”
This report highlights the Met Council’s continued inability to effectively manage the SWLRT project. The Met Council has not served taxpayers well. They have wasted taxpayer dollars in poor negotiations with contractors, and they have failed to hold contractors accountable for change order costs. Furthermore, the Met Council has done nothing to prevent the risk of future cost increases to the SWLRT project.
A fundamental change is required at the Met Council as they have proven themselves an ineffective steward of taxpayer dollars. Despite these repeated warnings, Democrats passed a tax increase last session that will hand this inept organization over $2 billion in the next four years.
Bottom line: We need to stop rewarding the Met Council for their wasteful, irresponsible spending.
Until next time, have a good Independence Day and, as always, please stay in touch and let me know how I can help.