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MINNESOTA: Despite gasoline tax hike, transportation needs money, lobbyists say

BEMIDJI -- A major infusion of $6.4 billion into Minnesota's transportation system amounts to only a third of what's actually needed, say transportation lobbyists.

BEMIDJI -- A major infusion of $6.4 billion into Minnesota's transportation system amounts to only a third of what's actually needed, say transportation lobbyists.

"It took 20 years since the last gas tax was passed, and we can't afford to let that happen again," Gary Botzek, government affairs lobbyist with the Minnesota Transportation Alliance, said Thursday.

"We have to stay on top of our infrastructure; we can't let it get run down," he said.

The Minnesota Transportation Alliance sponsored a forum for local House candidates Thursday at the Hampton Inn & Suites which also included House Speaker Margaret Anderson Kelliher. About 25 regional local transportation officials joined with House 2B and 4A candidates, as well as House Transportation Finance Division Chairman Bernie Lieder, DFL-Crookston.

After vetoes of transportation funding bills in 2005 and 2007, Republican Gov. Tim Pawlenty vetoed a 10-year, $6.4 billion funding package in the 2008 session which had passed the DFL-controlled Legislature with a two-thirds majority.


The Legislature, however, overrode the veto, with a 91-41 vote in the House, with six Republicans crossing over to surpass the needed 90 votes. The Senate concurred, with a 47-20 vote where 45 was needed.

"One of the things, for all of my time in the Legislature, I will be most proud of is the bill that we passed last year, bipartisan with your (MTA) help and so many members of the House," Kelliher said. "It was an incredible moment for the Legislature to have the opportunity to truly exercise its power and enact a law. It's pretty rare that that happens."

The bill provides a 5-cent a gallon hike in the state's gasoline tax, with 2 cents added last spring and 3 cents taking effect Wednesday. Another 3.5 cents a gallon is phased in over five years to pay debt service on road and bridge bonds.

It will mean, in addition to new funding for state roads, an additional $12.5 million over 10 years for Beltrami County state-aid roads and $1.4 million for city of Bemidji state-aid streets, said Margaret Donahoe, MTA executive director.

"If this bill hadn't passed, projects would have had to have been deferred because the costs are getting so high existing revenues simply would not allow a lot of the projects to stay on schedule," she said.

While the funding package will be a key piece in accelerating some projects now, Donahoe says there is a fear that lawmakers may consider their work done and not reconsider road and bridge funding for years again.

"When it takes a long time to pass, people think this is a pretty big bill and that transportation is finally taken care of," she said. "We really didn't take care of transportation. We made a great step forward in addressing the problems, but if you look at the identified needs ... it really only meets about a third of that identified need."

And while many Republicans this fall are using the gas tax hike as something burdensome to Minnesota, Donahoe said "a boatload of taxes" hasn't been passed on to motorists.


"That this is the largest tax increase in the history of Minnesota, some of the rhetoric that we hear, but really the impact is fairly modest for people," she said. "A 5-cent increase in the gas tax costs the average driver about $50 a year in added payments at the pump."

A two-car family would see $100 in additional cost in rural Minnesota, and $130 in the metro area where there is a new sales tax of 0.25 percent for transit programs, she said. "It really pales in comparison to the basic price of gasoline, which we have really seen gone up dramatically."

Had the gas tax been raised to keep pace with inflation since the last hike in 1988, the increase would have needed to be 14 cents a gallon, Botzek said, something politically unachievable.

The Minnesota Department of Transportation, in its last 20-year plan issued in 2004, estimated a funding gap of $1 billion a year to keep pace with maintenance and preservation of the state-run roads and bridges, he said. Another gap of $582 million a year is in local roads and bridges for counties, cities and townships.

There's also a growing gap in transit funding of $275 million a year, Botzek said. "There's a $1.8 billion gap (a year) over the next 20 years. That's a heck of a pothole to work over and work through."

Transit is becoming increasingly important in rural Minnesota as it is in metro Minnesota, officials said. The new funding bill provides additional funding for rural transit.

Bemidji, a growing regional center, is seeing an exponential increase in its dial-a-ride public bus system, said Greg Negard, director of Paul Bunyan Transit. The system had 79,000 rides in 2004 and is projected to give 106,000 rides this year.

"We try to focus on the individual needs of our community," he said. Most rural transit systems primarily serve elderly and disabled clients, but Negard said the local system has a huge service with college students. Paul Bunyan Transit has a contract with Bemidji State University and Northwest Technical College, so students just show their ID card and receive free service.


"I would ask the candidates to keep transit for greater Minnesota in mind," Negard said. "Right now we get about 500 phone calls a day of people requesting rides. The high cost of gas is driving up our ridership, and sometimes we have to tell people we cannot pick you up for an hour, hour and a half."

He wants legislative candidates to keep in mind that "Bemidji, being a regional center and it's growing, the demand for our services are growing."

One transportation service not affected by the new funding and in fact was cut in the last hours of the 2008 session was for aviation services, said Bemidji Regional Airport Manager Harold Van Leeuwen, who is also chairman of the Minnesota Council of Airports.

Taken for balancing the state budget was $15 million of a $21 million fund used to fund airport improvements. As a result, at least 40 projects across the state were canceled, including replacing a weather-related navigation aid at Bemidji. Also lost is about $106 million in federal funds that the state monies would be used to match.

"It was all collected from aviation," said Leeuwen, listing pilot fees, airplane registrations and other aviation fees. Northwest Airlines pays about 25 percent of the total fund. The state fuel tax for aviation, at 5 cents a gallon, hasn't been raised in 50 years, he said.

Leeuwen said airports will ask the 2009 Legislature to repay with interest and inflation $17 million to the fund, suggesting a variety of options including $5 million in bonding and $5 million in the first state budget year and $7 million the second from general funds.

"We want a seat at the table in the administration," he said, seeking to boost aviation at MnDOT up to at least deputy commissioner, a spot it once held.

"Aviation isn't looking for an extraordinary partner," he said. "We just want a reliable partner and we don't have that right now."



The Bemidji Pioneer and the Herald are Forum Communications Co. newspapers.

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