$6 billion idea called 'dramatic and politically unrealistic.'
Some small business owners in Minnesota are concerned about the governor’s proposal to raise gas taxes to pay for road and bridge repairs.
Gov. Mark Dayton’s plan would add a 6.5 percent tax on gasoline at the wholesale level. At current gas prices, that would be equivalent to a 16 cents per gallon increase at a minimum, giving Minnesota the 5thhighest gas tax nationally. Dayton is also proposing a half-cent increase in the sales tax in the seven-county metro area to pay for mass transit work.
“NFIB members are strongly opposed to this unrealistic plan that would raise $6 billion through the new sales tax on fuel and nearly $11 billion total,” says NFIB Minnesota State Director Mike Hickey.
Specific industries would be hit hardest, Hickey says. “The governor’s dramatic and politically unrealistic gas tax proposal would hurt companies that are big consumers of fuel or do extensive shipping,” he says.
In response to the governor’s plan, House majority Republicans have proposed their own 10-year, $7 billion investment plan that includes no tax increases, but they feel still meets the state’s transportation needs.
The state has a nearly $2 billion surplus, leaving many Minnesotans asking why they should pay more at the pump if the state’s budget is well balanced. In the Republican plan, $228 million of the surplus budget is allocated to repairing roads and bridges.
Both the governor and House Republicans acknowledge that transportation needs more attention. Seventy percent of people in a Star Tribune poll agreed the state’s roads and highways were in fair to poor condition. However, 52 percent of respondents opposed the gas tax proposal.
It’s an issue other states are wrestling with, too. Iowa, facing its own deteriorating roads, recently passed a controversial 10-cent increase in its gas tax.
The governor’s plan is dead on arrival in the House and the Republican majority will likely move their transportation plan by the end of April.
