DFLers say bigger surplus may throw cold water on gas tax

News that the state's projected budget surplus has expanded to nearly $1.9 billion has taken some of the urgency out of DFL Gov. Mark Dayton's argument that Minnesota needs a 16-cent per gallon tax increase on fuel to pay for an array of new road projects.

Among the skeptics are some Democrats who agree with the governor that the state needs another $6 billion over 10 years to pay for road construction but fear it will be a harder sell when the state has nearly $900 million more to spend in the next biennium than initially projected.

Senate Majority Leader Tom Bakk, DFL-Cook, isn't backing away from a Senate DFL plan that includes a 6.5 percent wholesale tax on gas. That's on top of the per gallon gas tax people pay when they fill up their cars.

Bakk says the tax is necessary because the state needs a long-term transportation funding solution.

"But clearly, now it will be easier to pop a Band-Aid on for two more years and hobble along, because people don't want to make these tough decisions," he said.

The gas tax was never going to be an easy sell in the Republican-controlled House, even though legislators there campaigned on the promise of putting more money into the state's roadways — particularly outside the Twin Cities, where the GOP won enough seats in 2014 to put it back in the House majority.

Instead, House Republican leaders proposed a $750 million four-year plan that would spend roughly $200 million of the budget surplus.

Now that the surplus has grown to $1.9 billion, House Speaker Kurt Daudt, R-Crown, says Democrats should back off their plan to raise the gas tax.

"Minnesotans already gave us money to pay for roads and bridges, and we have more than enough to spend a lot more money on roads and bridges today," Daudt said. "We don't need to raise the gas tax."

A recent poll shows 51 percent of Minnesotans disapprove of the governor's proposal, which includes the gas tax, while only 43 percent approve of it.

Some House Democrats who come from more conservative parts of the state say Daudt's argument is compelling.

Rep. Tom Anzelc, DFL-Balsam Township, said he'd support a gas tax increase if it were a bipartisan proposal. But since both sides aren't backing the idea at this point, he said the GOP plan looks like a better deal.

Rep. Paul Marquart, DFL-Dilworth, supports a higher gas tax, but thinks it will be politically impossible to put into law with such a large surplus available. Marquart said the amount of revenue Gov. Mark Dayton and Senate DFLers want to raise from the gas tax should be much smaller.

Some senators, including Sen. Lyle Koenen, DFL-Clara City, aren't sure the state needs to raise $6 billion in new revenue, either.

"That's the part that's still a question in my mind, is what level the gas tax has to be at," he said.

In the meantime, Dayton, his lieutenant governor, Tina Smith, and transportation officials have been trying to apply political pressure to Republicans by outlining precisely which projects their plan would pay for.

Late last month, Smith stood on a busy overpass near an interchange of interstates 494 and 35W to make the administration's case for more funding.

"We can either continue to live with this traffic, this lost time and money, or we can do something about it," Smith said. "It's not complicated, but we have to get real about what it's going to cost to do something about it."

Senate Transportation Committee Chair Scott Dibble, DFL-Minneapolis, proposed a plan similar to the governor's.

He said relying on surplus money as Republicans want to do is a bad idea because it doesn't create enough revenue, and because it's unreliable.

"What would ultimately happen in just a few short years when there's pressure on the general fund because of an economic downturn, transportation will get short-shrift very, very quickly," Dibble said.