A state senator proposed to fix transportation woes with a gas-tax increase of 5 cents per gallon and an added surcharge to purchased new and used vehicles.
Senate Minority Leader Sen. Dick Day, R-Owatonna, who announced his proposal almost two weeks ago, said the tax increase would generate $160 million per year and go to the Highway Trust Fund. Currently, each taxed cent brings in $32 million a year. His proposal includes an added surcharge of $125 and $75 to new and used vehicles, respectively.
“I’m a big believer that a gas tax is the real true user’s fee to build roads,” he said.
Day said the writing of the bill will likely be finished this week. If passed, it would be the first time since 1988 there has been a gas-tax increase in Minnesota.
Day’s proposal is one of many that will potentially evolve during this session to improve transportation. The money would help pay for building and maintaining roads. Gov. Tim Pawlenty and Lt. Gov. Carol Molnau already have a recommended 10-year, $7.2 billion transportation-improvement package.
Pawlenty’s proposal, called “Building More, Building Faster, Moving Better,” includes dedicating 100 percent of the motor vehicle sales tax to transportation through a constitutional amendment, which would provide $2.65 billion during 10 years. Voters could decide in 2006 if the full amount should go toward highways and transit. The other component is a $4.5 billion bonding package for major highway construction projects.
Brian McClung, Pawlenty’s press secretary, said the governor has a long-term vision for transportation improvement. If Pawlenty’s proposal is approved, it would be the largest transportation investment in state history, McClung said.
McClung said Pawlenty’s proposal is a “fiscally responsible plan” that doesn’t increase the gas tax at a time when people are already paying approximately $2 a gallon at the pump.
With Day’s bill, voters wouldn’t have a say through a constitutional amendment in the gas-tax increase.
McClung said he doesn’t think a gas-tax increase warrants changing the constitution. It’s a decision legislators can make, he said.
But Pawlenty is sticking to his no-new-tax pledge.
“The governor does not support a transportation bill that does not ask for voter approval on the gas tax,” McClung said.
At the University, 39 percent of staff members, faculty members and students drive or carpool to campus, according to University Parking and Transportation Services.
Tom Weaver said he takes the bus. He said he used to drive from Roseville, Minn., last semester, but the daily trek and parking became too expensive.
The first-year environmental horticulture student said he now saves money after having to pay $200 for a semesterlong parking spot and a weekly trip to the gas station last semester.
Though Weaver no longer drives to campus – he takes the bus – he said that he would think twice about driving long distances if there were an increase in the gas tax.
Sophomore Megan Wolfe said a gas-tax increase would not affect her. She said she also takes the bus.
Wolfe said she likes the idea of where the money from a gas-tax increase would go.
“It’s at least a good benefit if (the price) goes up,” she said.
Dean Showalter owns British Petroleum, on University Avenue Southeast, and other gas stations.
He said he’s not worried the gas-tax increase will prevent people from buying gas. Gas stations do not depend on gas sales alone, he said. Other things, such as food and beverage sales, supplement gas stations’ revenue, he said. Customers will continue to fill up on gas, but they might bypass buying food for the road.
“It seems like people will spend the money to get from point A to point B,” Showalter said.
Though he does not think fewer customers will come in, he said he’s not an advocate for a gas-tax increase.
“I’m not a big advocate of adding 5 cents a gallon to gas right now, because it’s so high,” he said.
University applied economics professor Gerard McCullough said it costs more to own a vehicle than fill up on gas every week.
“The 5 cents a gallon doesn’t really increase overall expenditures on the vehicle all that much,” he said.
It won’t change driver behavior either, he said.
But a gas-tax increase takes away discretionary expenses – like buying that bag of chips – for lower-income people, he said.
College students fit in that bracket. Showalter estimated 20 percent of his customers are students.
McCullough said a gas-tax increase could help save on long-term costs.
“We do spend a significant amount of money either having to buy new cars or repair the cars we have because of bad roads,” he said.