Minnesota Gov. Dayton Calls for Gas Tax Hike, Higher Spending

Published June 15, 2016

State lawmakers rejected Minnesota Gov. Mark Dayton’s (D) proposal to increase government spending and tax increases, prompting Dayton to refuse to call a special legislative session to resolve drafting errors in a recently passed tax bill.

Dayton is demanding lawmakers promise to pass a bill increasing infrastructure and education spending before he calls a special session to fix the tax bill. Dayton proposed either increasing the state’s taxes on gasoline—from 28.6 cents per gallon to 33.6 cents per gallon—or increasing the cost of annual car registration fees.

Lawmakers in the state House of Representatives refused both options, and Dayton vetoed the tax relief bill in June.

Unfair Tax Effects

Kim Crockett, vice president and senior policy fellow for the Center of the American Experiment, says gas taxes affect low-income individuals more than higher-income earners.

“For most people, raising the gas tax is a pay cut,” Crocket said. “It’s just another liberal policy that hurts the poor and people living paycheck to paycheck.”

Spending Bill Derailed

Crockett says a highway funding bill proposed during the regular session was tied to a plan for a light-rail system.

“That bonding bill tanked at the House at the end of the session, because the liberals in the Senate demanded, insisted, and amended the transportation bill to provide for Southwest Light Rail,” Crockett said.

Road Money for Roads

David Levinson, a professor of transportation engineering at the University of Minnesota, says ensuring transportation spending is prioritized correctly is a necessary first step in the debate over how to fund government road construction.

“We do need to be careful that the money gets spent on maintaining the valuable parts of the existing system, not building wasteful new facilities,” Levinson said. “There is a serious lack of trust in existing institutions. Minnesota, like all states, has built roads for political reasons rather than because demand warranted it.”

Levinson says the people benefitting from roads should be the ones paying for them.

“Roads, like electricity and natural gas, should be thought of and managed like a utility, and the beneficiaries should pay a proportional [amount] to use [them],” Levinson said. “This requires significant governance reforms but would help reduce politically driven investments.”

Jeff Reynolds ([email protected]) writes from Portland, Oregon.