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Minn. Chamber looks at gas tax hike

WILLMAR -- The Minnesota Chamber of Commerce is considering supporting a proposal to raise the state gas tax 7 1/2 cents and increase license tab fees to help pay for roads, bridges and transit projects.

WILLMAR -- The Minnesota Chamber of Commerce is considering supporting a proposal to raise the state gas tax 7½ cents and increase license tab fees to help pay for roads, bridges and transit projects.

Before the Chamber's board of directors votes Thursday on whether or not to adopt it as a policy to promote during the 2008 legislative session, the proposal is being presented to local Chamber groups to get a thumbs up or down.

During a presentation Monday in Willmar, Dave Olson, president of the Minnesota Chamber of Commerce, said he has been taking the proposal on a "test drive" around the state. Olson said he's been "getting some pretty good input," but the reaction to transportation tax increases has been mixed.

For the past five years, Olson said the Chamber has supported a 5-cent gas tax, but is now considering endorsing a 7½-cent increase.

It's the only tax increase the Minnesota Chamber of Commerce, which is the state's largest business interest group, will support, he said.

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Frustration with the failure of a transportation bill last year and the lack of progress on transportation and transit projects is making Chamber members more willing to support a larger increase in the gas tax, Olson said.

Gov. Tim Pawlenty vetoed the transportation bill last year, which included a 7½-cent increase in the gas tax, and Olson said Pawlenty "will not support" a 7½-cent increase this year.

It was a little hard to tell exactly what members of the Willmar Lakes Area Chamber of Commerce thought of the state Chamber's transportation proposal.

"So, is this good, bad or otherwise?" Olson asked. "Can you live with this?"

One participant said he liked the proposal and another said the gas tax would be OK if the revenue was really used to reduce transportation congestion.

But there was a moment of silence when Olson asked people to raise their hands if they did not like the plan. Olson said if people did not feel comfortable expressing their views at the meeting, they could contact him before the Thursday vote.

Willmar Mayor Les Heitke asked if a 7½-cent gas tax would stand up to public "scrutiny" if put to a vote.

Based on polls, Olson said he thought such a proposal would fail. But, said Olson, "you can't do everything by polls" and that "leadership" is necessary to move transportation funding ahead.

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The draft proposal Olson presented includes a 5-cent-a-gallon gas tax increase, plus an additional 2½-cent gas tax that would be dedicated to finance debt service on trunk highway bonds. The Minnesota gas tax has not been increased since 1988.

An increase to license tab fees on new vehicles -- those purchased after the fee increase is enacted -- is also part of the Chamber's draft proposal.

Olson said the Chamber may support an increase that would bring license tab fees "halfway back" to where they were before Gov. Jesse Venture lowered them. Polls show Minnesotans don't want tab fees to increase, he said.

The plan also supports using general obligation bonds to fund bridge improvements and trunk highway bonding to "accelerate projects throughout the state."

To counter the argument that bonding simply means "our children" will pay for roads, Olson said that since roads last 50 years, our children should indeed help pay for roads built today.

For transit funding, which includes commuter rail and buses, the Chamber is proposing $100 million a year.

Because of distrust with how the Minnesota Department of Transportation handles money, Olson said the state Chamber's draft policy also includes provisions to improve efficiencies at MnDOT.

When asked about Lt. Gov. Carol Molneau, who is also the transportation commissioner, Olson said the Chamber has no position on whether she should stay or go at MnDOT.

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His only concern is that legislators will spend valuable time "raking her over the coals" and will fail to put together a transportation bill that will actually be approved this year.

Olson said different entities like the Chamber, the Minnesota Transportation Alliance and industry groups will have to work together to promote a package to legislators.

"Our goal is to make something happen this year," Olson said.

Carolyn Lange is a features writer at the West Central Tribune. She can be reached at clange@wctrib.com or 320-894-9750
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