Proposal to dedicate auto parts sales tax revenues could mean more money for local roads, bridges

The new tire you bought could help fix the pothole that caused the flat.

Sponsored by Rep. John Petersburg (R-Waseca), HF1012 would dedicate all sales tax revenue on auto repairs and replacement parts toward transportation purposes, with 84% going to the Highway User Tax Distribution Fund, 8% to the Small Cities Assistance program and 8% to town roads.

The bill was laid over Tuesday by House Transportation Finance and Policy Committee for possible omnibus bill inclusion.

Under current law, $145.6 million from auto part sales taxes goes to the Highway User Tax Distribution Fund and the rest to the General Fund. The difference is expected to be more than $360 million the next biennium. Cities with populations less than 5,000 would receive about $26 million in each of the next two years.

Anne Finn, intergovernmental affairs director for the League of Minnesota Cities, testifies before the House's transportation committee March 21 in support of HF1012. Rep. John Petersburg, right, sponsors the bill. (Photo by Andrew VonBank)

Townships contain about 45% of the state’s roads and get virtually no state dollars to maintain them, said Petersburg.

Rep. Frank Hornstein (DFL-Mpls), who chairs the committee, said discussions of specific percentages would likely continue, but ensuring consistent funding for small cities has been an important issue for legislators on both sides of the aisle.  

Bill opponents, however, say statutory dedication would tie the hands of future legislators and inhibit their ability to adapt to changing needs or address a crisis.

Given multiple state and federal funding sources, where money for roads and bridges go is about political will to prioritize the money, said Devin Bruce, public affairs coordinator for Minnesota Association of Professional Employees. The organization opposes dedicating General Fund money for any purpose.

Transportation funding from sources such as the gas tax are declining, said Rep. Nolan West (R-Blaine), and he doesn’t see how the state could do any transportation projects on its list without new money.

“Roads like Highway 65 won’t get done without it,” West said.