Sen. Torrey Westrom: Senate DFL's Omnibus Transportation Finance Bill will mean everyone pays more
In the coming days, the Senate will be taking up the DFL’s recently introduced Omnibus Transportation Finance Bill. Unfortunately, it is an "uff-da" bill and everyone is going to pay more under the Senate Democrat's budget. This omnibus bill shows proof of that. Listed below are some of the major fee and tax increases in the bill.
Gas Tax: The bill introduces a new distributor gross receipts tax (sales tax) at a rate of 5.5 percent. This tax is based on the value of the fuel, not volume. The base gas tax rate is reduced from $.25 per-gallon to $.19 per-gallon to offset only a portion of this big increase. Since this new "sales tax" is tied to the price of fuel, revenue collections would automatically escalate with rising prices. Based on these estimates and recent gas prices, the tax would be equivalent to about a 10 cent a gallon increase. This is expected to generate $447.6 million annually by Fiscal year 2016-17. Like the current gas tax, this revenue is constitutionally dedicated to highways and does not apply to off-road uses.
Greater MN Sales Tax by Resolution: Under current law, a county outside the metropolitan area can impose a sales tax of up to .5 cent for a specific transportation project if it is approved by a voter referendum. Since it's not as easy to raise taxes with voter approval, they instead allow all rural counties to impose the sales tax increase without a voter referendum (board resolution), and allow the money to be used for transit capital and operations.
Wheelage Tax: Under current law, metropolitan counties can collect $5 per vehicle, per year. This bill would allow all counties to collect $10 from 2014-2016 and up to $20 per vehicle in their county thereafter.
Drivers License Agents: The driver’s license filing fee is increased from $5 to $8.
Motor Vehicle Lease Tax: Under current law, $27 million annually is split evenly between metropolitan county highways and Greater MN Transit. Under this bill, $9 million would be retained by the counties and the remainder would go the Greater MN Transit.
Metropolitan Sales Tax Increase: Under current law, metro counties can opt into the Counties Transit Improvement Board (CTIB) to collect a .25 cent sales tax for expanding transit services. This bill imposes a ¾cent sales tax for transit expansion and operations on all seven metropolitan counties. This is estimated to generate an additional $317.8 million in FY 2014-15.
MVST Rate Increase and Use: The Motor Vehicle Sales Tax rate is increased from 6.5 percent to 6.875 percent of the vehicle purchase price. This will raise an additional $70.8 million in FY 2014-15.
New City Street Maintenance Districts: Cities would be authorized to assess property owners a street maintenance fee for street projects identified in an adopted maintenance plan. The fee could be imposed through an ordinance of the city council, but could not be collected from public charities. Criticism of this is that it circumvents the current assessment process which allows for due process by giving property owners a right to appeal if they believe projects cost too much.
We need to have a government that is more efficient and responsible with the taxpayers’ dollar. Before we ask for a semi-load of new taxes from hardworking taxpayers, we need to go line-by-line through Minnesota’s budget to ensure that our current spending is as effective as possible.