ST. PAUL – House Democrats are expected to approve today a transportation bill (H.F. 1555) which increases the gas tax by 20 cents per gallon – a 70-percent increase – and in total raises taxes by more than $4 billion over four years.
“While we need to improve our roads and bridges, I disagree with adding 70 percent more to the gas tax because it hurts middle-class and lower earners and people of Greater Minnesota the most,” said Rep. Paul Anderson, R-Starbuck. “It is very concerning to think about how this would negatively impact the ag. industry – dairy in particular – at a time farmers already are operating on such tight margins. With a $1 billion state surplus, there are other ways of providing more transportation dollars without raising taxes on people who can least afford it.”
In addition to the increase of 20 cents per gallon – which would give Minnesota the fourth-highest gas tax in the country – the House Democrats’ transportation bill increases the vehicle registration tax, the metro sales tax, and the new vehicle sales tax will increase taxes on Minnesotans by a combined $2.3 billion.
The bill transfers statutorily dedicated auto parts sales tax funds – $417 million in 2020-21 – into the general fund. This reverses the major investments House and Senate Republicans made during the last biennium to fund road and bridge infrastructure without a gas tax increase. Nearly half of the 20-cent gas tax increase would go toward backfilling of those diverted revenues.
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