On transportation, lawmakers look to previous plan

ST. PAUL -- Transportation funding advocates at the Capitol have been traveling in virtual circles the past few years, looking for a route leading to more highway and transit money.

In 2005, Minnesota lawmakers turned onto the path of gasoline tax increases. That proved to be a dead end when Gov. Tim Pawlenty vetoed their bill after offering numerous signs warning he would do just that.

Last session, in a non-budget-setting year, transportation-minded legislators couldn't find a compromise direction. They vowed to return in 2007 knowing the correct avenue toward more transportation dollars.

Lawmakers appear poised to continue their debate Jan. 3 when they return to St. Paul in the same spot they left off, considering a higher gasoline tax.

"That's exactly what's going to happen," said Rep. Bernie Lieder, one of the Legislature's transportation experts.

Leaders in the DFL-controlled House and Senate plan to begin this year's transportation funding discussion by again heading down the path of a gasoline tax increase, knowing Pawlenty has said he still opposes that option.

"I'm not proposing and won't be proposing tax increases of any sort," the Republican governor told Capitol reporters.

"As we introduce the bill, I'm sure that it will have some gas tax component in it," Sen. Steve Murphy, DFL-Red Wing, said. "What the bill looks like when it comes out of committee is anybody's guess."

Murphy, the Senate's transportation leader, and his House counterpart, Lieder, say raising the gas tax would help get the state closer to funding its transportation needs, which experts estimate would cost up to $2 billion annually.

"Nobody likes to increase taxes," said Lieder, DFL-Crookston. "It just appears there has to be something done."

Sen. Keith Langseth, DFL-Glyndon, predicted lawmakers will settle on a 5-cent or 6-cent increase in the gasoline tax, and it could withstand a veto by Pawlenty.

A nickel-a-gallon tax increase would provide $160 million more transportation funding annually, Langseth said.

If Pawlenty won't support a legislative proposal similar to the one he rejected in 2005, maybe lawmakers should consider a smaller increase in the gas tax, said Rep. Lyle Koenen, DFL-Clara City.

Rural Minnesota needs more transportation money because its roads are plowed less frequently in the winter and they have become more dangerous, Koenen said.

"The roads are just plain falling apart, to put it bluntly," he said.

Not all lawmakers are ready to back a gas tax increase, one of several taxes and fees being considered as additional revenue sources.

Rep. Bud Heidgerken, R-Freeport, said he is wary of voting to raise the tax because in the past it hasn't been popular back home. Sixty-seven percent of constituents who responded to Heidgerken's legislative issues survey opposed paying more at the pump, he said.

"I would have to really seriously look at it," he said, noting that many other states have increased their gas tax since Minnesota last raised its tax in 1988.

Assistant House Majority Leader Frank Moe, DFL-Bemidji, said using part of the $1 billion in one-time surplus money for transportation is possible, Moe said, although a long-term solution is needed.

"The need isn't just $1 billion once," House Majority Leader Tony Sertich, DFL-Chisholm, added.

Sertich said he would not reveal Democrats' plans but said Minnesotans should expect transportation to be examined early in 2007. "You will hear some really important hearings right off the bat in the first month."

Lawmakers from outside the Twin Cities area said they will oppose any transportation funding plan that shortchanges greater Minnesota. Heidgerken, whose legislative district is mostly rural, said previous proposals took money from roads in his area for use in the Twin Cities.

"I will not support anything that changes the formula as it is," Heidgerken said of the distribution of gas tax revenue.

A new funding package must address rural needs, Heidgerken said.

"Our roads are older roads," he said. "We've got all the old infrastructure out there and it's getting to be very difficult to maintain."

The state's highways and transit systems are guaranteed an influx of new dollars even if lawmakers can't agree on other funding sources. Voters decided in November that tax revenue from the sale of new and used vehicles should be constitutionally dedicated to transportation.

Pawlenty said how lawmakers decide to divide that money between highways and transit "is going to be at issue" during the session.

That revenue will be phased in over five years, but even when fully implemented, lawmakers say the $300 million annually won't be enough.

"When you look at the overall need, it doesn't get us a quarter of the way," Murphy said.

In past years, Pawlenty has proposed borrowing money to pay for transportation improvements, saying that the state uses bonds to fund many other projects. Democrats have opposed that, arguing the state should pay up front for highways and transit.

Pawlenty has not released his 2007 transportation funding plan but said it will include a pilot project to "start replacing the gas tax" with alternative funding sources.

In 10 or 15 years, Pawlenty said many Minnesotans will be driving vehicles that run on alternative fuel sources, such as hydrogen. Gas tax revenues are already beginning to decline, he said.

"It is not the horse to ride beyond the near and intermediate future," he said.

Langseth, long one of the Legislature's top transportation funding advocates, rebutted Pawlenty's argument that gasoline taxes will fall because of more fuel efficient cars and other forms of fuel becoming popular.

"They have said for 20 years that the gas tax will go down," Langseth added, "but I think it probably still will be the base of our funding for the next decade."

Another option lawmakers could explore, Lieder said, would be to consider replacing the gasoline tax with a mileage tax based on the distance driven.

"We think that's going to be the alternative a few years down the road," he said.

Lawmakers also are expected to debate whether the state's new highways should be built to withstand heavier vehicles. Some want new roads to accommodate 10 tons of weight per vehicle axle. Currently, roads are built to a 9-ton standard, Lieder said.

Opponents say that costs more and will result in fewer miles of new highways. Lieder, the top House member on transportation issues, said he used to be against a 10-ton limit because of funding concerns but now supports the higher standard.

Koenen said the state should adopt the 10-ton limit. Manufacturers and farmers are using bigger vehicles, he said.

"Let's face it. The heavy trucks are here and they're not going away," he said.

-- Capitol Bureau reporter Don Davis contributed to this story.