Think taxes are bad? Watch the fees

There are proposals to raise fees for boat registrations and mortgage applications. Deer hunters who want to bag a buck may have to pay a buck more in fees, and it could cost more to register ATVs.

All kidding aside, Gov. Pawlenty and state lawmakers are considering new fees and higher fees to help pay for a variety of state programs.

Sen. Ellen Anderson, DFL-St. Paul, is the Senate author of the environment and natural resources budget bill, which raises fees on boats and ATVs. Anderson said the new money will be spent to maintain ATV trails in state parks and that the boat fee will help prevent the spread of invasive species into the state's waters.

"We just haven't had enough money in the state budget to do the job adequately, Anderson said. "We know that environment and conservation programs are at their lowest level of funding in some 30 years. So we've been forced to raise some fees to pay for some programs."

If the bill passes, the fee on your canoe would go from $10.50 to $15.50. If you have a big pontoon boat, it would go from $67.50 to $82.50

Some state fees are dedicated to pay for specific programs. Other fees go right into the state's general fund. The difference this year is that those who have criticized Gov. Pawlenty in the past for increasing fees are now pushing for fees.

The Minnesota Finance Department says fees totaled more than $900 million in 2005, a big jump from four years earlier.

After taking heat from DFLers during last year's campaign, the governor said in January when he announced his budget that he was backing off fees.

"The fee increases in this budget are at a historic or near a historic low," Pawlenty said. "They total about $47 million and almost all of that is not in the general fund or in dedicated accounts used for particular purposes."

In other words, the extra money spent in fees for a hunting license will go to wildlife management. But Pawlenty's budget proposal hasn't stopped some lawmakers from worrying about the focus on fees.

"We talk about taxes a lot more than we talk about fees," said Rep. Chris DeLaForest, R-Andover.

In committee last week, DeLaForest discussed his proposal that would forbid state agencies from creating new fees or raising fees. DeLaForest sais he's worried lawmakers are using fees as a back door way to get more money into the state treasury.

"The Legislature has a lot more control over taxes the we do over fees," DeLaForest said. "Fees all too often disappear into the bureaucracy and it seems to me, at least in my opinion, on the whole controlled by the bureaucracy than controlled by the Legislature."

"In two years, we raised the fees on boats 100 percent. Now is that a tax? It sure comes out of people's wallets like a tax."

The committee chair said DeLaForest's proposal is unlikely to go anywhere this session.

Other lawmakers say fees are now doing what state taxes used to do. Sen. Tom Bakk, DFL-Cook, chairs the Senate tax committee. He says increasing fees is less fair to lower income Minnesotans than raising income taxes.

"Two years ago we raised fees on boats under 19 feet. We raised them by fifty percent. This year we're raising them by fifty percent more. So in two years, we raised the fees on boats 100 percent. Now is that a tax? It sure comes out of people's wallets like a tax."

But the problem for Bakk and others who want more money for state programs is that the governor has threatened to veto any new taxes. So there may be a push to increase fees to pay for programs.

But House Speaker Margaret Kelliher, DFL-Minneapolis, says there's a difference between increasing fees that are specifically earmarked for one program and raising fees that go into the state's general fund. She also says some groups, like farmers who want to put "Minnesota Grown" labels on their products, asked to increase their fees.

"The difference is when people are actually balancing the state budget by raising fees," Kelliher said. "Versus where folks have came forward and said 'To be able to do this activity, to directly fund an activity like the Minnesota Grown program, it is important to actually provide the funding in that way," she said.

Not all of the House budget bills have been released yet so it's unknown how many fees Kelliher and House DFLers will propose. But one thing is for certain, the fee increases already on the table will impact every aspect of Minnesota life. Fees for health screenings for newborns, driver's licenses and funeral homes may all go up under Gov. Pawlenty's budget plan.

Gallery

Fullscreen SlideshowPrevious Slide

1 of 1

Next Slide