Minnesota House passes gas tax hike, setting up fight with GOP Senate

The DFL-led Minnesota House passed a 20-cents-per-gallon gas tax hike Monday to improve the state's roads and bridges, delivering on one of Gov. Tim Walz's top policy priorities, but one that faces resolute opposition in the Republican-controlled Senate.

The bill would raise the state gas tax over four years and then increase with inflation after that. It also would increase the metro sales tax by a half cent and raise car registration fees.

It passed the House on a mostly party-line 74 to 58 vote. Senate Republicans have long vowed to fight the proposal, which would push the gas tax from 28.5 cents to 48.5 cents per gallon — a 70% increase.

"We're not going to do a gas tax," said Senate GOP Majority Leader Paul Gazelka, R-Nisswa. "I've made it very clear that is not a direction we're going to go."

The House plan — similar to a proposal offered by the DFL governor — would provide an extra $1 billion in road and bridge funding and $400 million in transit upgrades during the next two years, and even more after that.

"Minnesotans want safe, modern, efficient transportation," said Speaker Melissa Hortman, DFL-Brooklyn Park. "The needs are obvious. All you need to do is get in your car and go somewhere and it is clear we have underinvested in transportation."

Despite Senate Republicans' commitment to zero gas tax increase, Hortman made clear that Democrats are determined to raise more money for transportation infrastructure, suggesting that their differences could threaten the Legislature's adjournment date. "I don't plan on leaving the building until we have long-term, sustainable funding for transportation," she said.

The Legislature has a May 20 deadline to finish its work on a two-year state budget that will likely top $45 billion.

Although the gas tax is dedicated to roads by virtue of the state Constitution, the debate over the proposal is part of a larger dispute between the two parties about spending on government programs. The House DFL plan would shift some sales tax money currently dedicated to roads back into the general fund that pays for schools, health programs, parks and other services. They would use part of their proposed gas tax increase to fill the gap in the road fund caused by this sales tax shift.

House Republicans voiced strenuous opposition in a gas tax debate that started last week and continued Monday, with GOP lawmakers offering dozens of amendments, most of them defeated in party-line votes.

"This is highway robbery," said Rep. Jon Koznick, R-Lakeville. "If you're a hockey family and you're driving around the state of Minnesota, hockey just got a lot more expensive."

A 15-gallon tank of gas would cost an extra $3, once the proposed tax increase is fully phased in. Republicans seized on a recent report from Walz's own Department of Revenue showing the gas tax increase would hit lower income Minnesotans hardest.

State transportation spending is up more than one-third since 2012, but the Minnesota Department of Transportation says too much recent investment has gone to debt service, while increasing construction costs have eaten into the buying power of the current gas tax.

Walz reiterated his support for the tax increase Monday.

"I'm willing to listen to [Republicans] on this, but at this point in time, there's a need that's out there. I showed us how we pay for it, and I'd like to continue down that road," he said.

J. Patrick Coolican • 651-925-5042