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MN2020 - Can Business Move Pawlenty on Transportation?
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Can Business Move Pawlenty on Transportation?

November 12, 2007 By Conrad deFiebre, Transportation Fellow
 
Little by little, Minnesota's biggest and most influential business lobby is throwing its weight behind the investments in roads, bridges and transit the state needs to regain its fading economic competitiveness.

The latest move from the Minnesota Chamber of Commerce is a commitment to support an extra $1.2 billion in government investment over 12 years to speed development of five Twin Cities transit lines by 2020 - at least a decade earlier than current funding would allow.

So far, the chamber has identified a source for only about half of the money: a transfer of motor vehicle lease taxes from the state general fund to transit construction and operation. Gov. Tim Pawlenty has already proposed such a move, noting that it would impose no new taxes.

The chamber is nearly as tax-averse as the governor, but it has backed annual increases of about $260 million in gasoline taxes and vehicle registration fees dedicated to roads and bridges. It has called for a 5-cents-a-gallon hike at the gas pump and lifting of some of the caps on tab renewal fees enacted under Gov. Jesse Ventura. 

Neither of those proposals has made it into law, thanks to Pawlenty's veto of two bipartisan transportation funding bills. The chamber cheered those vetoes, claiming the bills would have raised taxes higher than business wanted and damaged our economy. Legislators will try the proposals again next year in the charged atmosphere of the I-35W bridge collapse aftermath, a looming dropoff in road construction with the expiration of Pawlenty's four-year bonding program and an election year for House members.

Meanwhile, Minnesotans are beginning to benefit from the chamber's biggest transportation victory in decades, the 2006 constitutional amendment dedicating motor vehicle sales taxes to roads and transit. Another no-new-taxes shift from the general fund, it will add $300 million each year to state transportation coffers after full implementation in 2011.

Altogether, the chamber now has advocated just over $600 million a year in new transportation funding from specific sources.
 
Through business support for a local sales tax, Denver has an extensive Light Rail Transit network. (Click image to enlarge)
That's a lot of money, but still only one-quarter of the $2.4 billion annual shortfall identified by the Minnesota Department of Transportation. The actual cash infusion achieved so far by the chamber is even paltrier: $60 million in this first year of the vehicle sales tax transfer.

Compare that to the recent strides made with business support by some of the Twin Cities' peer regions:

  • Phoenix -- $8.5 billion in new sales tax revenue over 20 years for roads and transit.
  • Denver -- $4.7 billion in new sales tax revenue over 12 years for bus and rail transit.
  • San Diego -- $14 billion in new sales tax revenue over 40 years for transit.
  • Salt Lake City -- $2.5 billion in new sales tax revenue over 10 years for transit.
With the Minnesota Chamber's opposition, efforts to match those commitments via a half-cent Twin Cities sales tax for roads and transit have failed. Perhaps not coincidentally, our region is falling far behind those others in economic advancement.

Here's the score from the U.S. Department of Labor for real regional gross domestic product growth in 2005, after most of the other areas' sales taxes kicked in:

  • Phoenix, 6.1 percent
  • Salt Lake City, 5.4 percent
  • Denver, 3.9 percent
  • San Diego, 3.3 percent
  • Minneapolis-St. Paul, 1.4 percent
So, congratulations to the Minnesota Chamber for dipping another toe in the transit financing waters. Its developing plan would establish rail lines between the Minneapolis and St. Paul downtowns and to the southwest suburbs, as well as three bus rapid transit routes to the northwest and southern suburbs.  

It's a start. But there's so much more to be done.


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