Transportaton funding in Minnesota

If you are in Minnesota, these two past weeks have been all about transportation. We had a report from the state auditor, we had a comprehensive bill passed by the state legislator, followed by a veto from Governor Pawlenty, followed by the legislator overriding the veto, and finally an ouster of Lt. Governor Molnau from her position as Commissioner of Transportation.

I am going to look at all of these issues in a number of future blogs, but in this first blog I am going to focus on what we the people are saying in letters to the editor in the Strib and Pioneer Press.

From the Strib on Feb 25, written before override vote, (this is the only letter that is not in its in entirety, the rest are),

This transportation funding bill is a compromise and reflects the legislative process at its best. This compromise has the support of not only the Itasca Project and its 45 CEOs of the state’s largest companies, but it has the support of virtually all of the state’s major business and trade organizations.

We understand and respect Gov. Tim Pawlenty’s philosophical views and his opposition to any tax increases. However, the Itasca Project participants and the Minnesota business community leaders recognize the need to invest in and maintain our state’s vital transportation infrastructure. We see daily how growing congestion makes it increasingly difficult to move products in our state’s economy.

JIM CAMPBELL, MINNEAPOLIS, COCHAIR OF THE ITASCA PROJECT AND THE RETIRED CEO OF WELLS FARGO BANK, MINNESOTA REGION; AND Mary Brainerd, Minneapolis, cochair of the Itasca Project and CEO of HealthPartners

So Minnesota business leaders are saying that Pawlenty is against any tax increases, and they are calling this increased taxation an investment.

Next in the Strib on Feb 26, we have this letter,

Pay as you go?
The Legislature and the governor agreed that our transportation system needs fixing. The only question was how to pay for it — raise the necessary funds through taxes, or borrow money and go into debt, adding interest to the cost, and postponing payment into the future?

Gee, our children only have the egregious national debt, a troubled Social Security system, health care for an aging population and global warming to worry about. Why not saddle them with roads, too?

LISA WERSAL, VADNAIS HEIGHTS

This letter is getting to the heart of the funding process. Do we want to pay for the needs as we go, or do we want to borrow? I suspect that continued borrowing will hamper our ability to deal with our roads and we will discuss this further issue in further detail in later blogs.

Next we have this one in the Strib from Feb 27,

VETO OVERRIDE
Odd timing

How grimly ironic! The federal government is sending out tax rebates to stimulate the economy and ease the recession, but before the checks are even in the mail, our local government has decided to steal our rebates by raising our taxes with the help of a few Republican turncoats.

The price of gasoline isn’t high enough already, so our legislators are going to make it even more expensive. This nation is facing the worst recession in decades. The cost of food and energy is skyrocketing, and people are losing jobs and their homes in record numbers. Bankruptcies are setting records, people can’t afford health care or medication, and lawmakers raise our taxes to build a ballpark for a private enterprise and fix a few bridges.

Simple economics dictate that when finances are maxed out or stressed, one should cut back on spending. Not so with our local legislators — they do just the opposite and spend more of our money.

RICHARD MEIXNER, CHANHASSEN

Ah, the standard Republican frame of taxation as theft. On the issue of timing, apparently Mr. Meixner has a very short memory. This legislature tried to raise the taxes in 2007 and in 2005, in 2005 the price of gas was around $2.00. In another blog, I will discuss the issue of the amount of taxes in terms of inflation adjusted dollars, and as a percentage of the price of a dollar of gasoline.

In the Strib on Feb 29, there were two posts. The first questions our education system, the second is a very valid point.

Repeat of 1776?
Once again, there was a tax levied without a referendum. The 0.025-cent increase in the metro-area sales tax is reminiscent of the tax increase that was levied on Hennepin County for the new Twins ballpark.

There was a time in our country’s history when colonists went to war with Great Britain over taxation without representation.

JON MCCOLLUM, PLYMOUTH

Maybe Mr. McCollum has been watching the View too much, or maybe Whoopi Goldberg has a book on Civics that should be burned, but he has been represented. The legislator has two bodies, one is the House of Representatives (hmmm, that seems ironic) and the Senate, both are representative forms of democracy. Now I will cut him a little slack because there are provisions for direct democracy, in the form of the referendum, for stadium funding. I would have liked to have the chance to vote on the Twins stadium funding, but the representative body, the legislator has the ability to override that.

The second letter that day,

The hidden cost
To all those who think the gas tax will cost us no more than $4 a week, please consider how most products travel — by road. This tax will trickle down into most products and services. Suppliers now have an opportunity to raise their current delivery charge because of the tax. Don’t fool yourselves, it will cost you more for the few it will benefit.

JOE KOHAUT, BURNSVILLE

I think the overall concept is very dead on. Increases to energy costs will be passed on to consumers. There are two issues I have with the letter, it isn’t $4 per week, it is $4 per month. On the issue of suppliers now have the opportunity to raise the costs, apparently Mr. Kohaut has his head in the sand. Costs have been going up already, the rise in the cost of gasoline, independent of any increases in gas taxes, over the past decade, has driven this, they have not been waiting for this tax increase to justify it.

Over in the Pioneer Press we have these letters.

Note: since they don’t list the date in the paper on the web page, I am going by the last time updated on the web page

On Feb 20 we have this one,

Unsafe investments
During the past two years, my wife and I invested more than $50,000 into our East Side home. This included energy-saving systems for heating, cooling, water and new windows. We calculated hundreds of dollars a month in savings. That allowed us to finance it all.

In other words, we made a huge investment in our future and in the city of St. Paul. Now, politicians want to steal it away, saying we are also responsible to make a huge investment in everything they dream up.

Our property taxes are going up by double digits. The DFL plans a 38 percent increase in the gas tax, a 13 percent increase in sales taxes and a drastic, expensive overhaul of health care. St. Paul schools, with enrollment falling by 1,000, want more money, instead of making necessary cuts.

Truly, 2008 is the year of political insanity. Politicians have shown there is no reason to invest in the future, because they plan to steal from it as soon as it arrives.

DAVE RACER

St. Paul

First, we get the taxation as theft again. Second, we use accurate, but extremely misleading numbers by using percent increases, it makes it seem much bigger than it is. Third, apparently investing is okay, but only on a personal level, not on a societal level. Unless they go out and fund an off ramp that benefits them and others, I just can’t get this selfish hypocrisy.

On Feb 25 we have this one,

Don’t raise tab fees
Regarding the Minnesota transportation funding law, I have noted numerous comments about the proposed increases in gasoline and sales taxes, but little about possible effects of the increase in license tab fees. We need to raise more tax dollars for transportation purposes, but I feel strongly that license fees on new motor vehicles should not be increased.

The increase will discourage me and probably many other potential buyers from buying a new car anytime soon. It had this effect the last time the license tab fees were outrageously high, and it will again.

The economy appears to be in a pre-recessionary state. The U.S. government is planning to send “rebates” to encourage spending, thereby stimulating the economy. The Minnesota law may have the opposite effect, adding to the problems of an already-struggling automotive industry.

Richard Fayling, White Bear Lake

When Jesse Ventura reduced the license tab fees I thought it was a huge mistake. As my friend Rick would say, “no one put off buying a car because the tab fees were too high.” Now apparently he was wrong if Mr. Fayling is being truthful. My best guess though is that Mr. Fayling took advantage of reduce tab fees post Governor Ventura’s action, and may be looking at getting new car in the next few years. If the tab fees go up, and don’t change in the future, it will just be a part reluctant part of his calculation. The automotive industry is hurt by more things then a gas tax increase or license tab fee increases.

On Feb 27, we have this letter,

Unpleasant but necessary
Been to the dentist lately? Like it? They sit you down, make your head numb, and drill your teeth. Unpleasant but necessary. If we don’t go, our teeth rot. I knew a man who never saw a dentist. He died from an infection caused by tooth decay. Unpleasant.

Nobody likes taxes, either. Unpleasant but necessary. We need what they pay for.

The irony surrounding the gas-tax increase is striking. We bellyache about our roadway infrastructure, yet scream when people we elect say it’ll cost 8.5 cents a gallon in tax to fix. This while we meekly drive our SUVs to gas stations and pay price gouges of 25 cents a gallon whenever some oil potentate has flatulence.

Oil executives go from wealth to obscene wealth while our bridges and highways crumble.

Gov. Tim Pawlenty says borrow the money. Let the grandkids pay for it. Brilliant, Tim.

Maybe an adjustable-rate loan?

C’mon, get real!

A.T. Chapman, Cottage Grove

This letter writer makes a good point about increases in gas prices in comparison to the permanent increase in gas tax that our government will capture (not steal) to invest in our transportation system.

This following letter is the far and away my favorite one from the past week. I think the writer hits a huge and important issue, how we calculate the tax. This from Feb 27 in its entirety,

Revising gas-tax collection

Why are gas taxes pegged at cents per gallon, instead of a percentage of the retail price of a gallon? Most taxes are based on dollars: the sales tax, the income tax, the property tax. Pegging the gas tax on gallons dooms it to constant underfunding. Maintenance costs go up every year.

Changing to a dollar base might not be enough. When I buy a hybrid that uses half the amount of gas, your funds will decrease. And when I buy a “plug-in” that goes on electricity, what then?

We need better solutions. Perhaps a quarterly or annual mileage report, with a tax based on mileage pegged to the current price of gas, might help. We also have the technical ability to assess road-use taxes based on cameras mounted in the metro area. What else?

Elwyn H. (Al) Sands, Roseville

Mr. Sands asked a question that no one else I have read this past week has, why is the tax a fixed amount per gallon, as opposed to a percentage of dollar cost for the fill up.  If it has been structured this way, the amount collected would have tripled in the past decade as the price of gas has tripled.  Both methods of calculating will have the same issue with increased fuel mileage standards leading to reduce gas consumption, and the corresponding reduction in tax collection.  However, he does offer a solution, in terms of taxation tied to miles driven.  Any program like that should have credits or breaks for rural drivers as they have less control over the their driving options than those of us in large urban areas.

This Feb 28 letter has a good point,

The Easy Way Out
Since the collapse of the I-35W bridge, I’ve read article after article on how MnDOT is mismanaged, lacks controls and doesn’t know how to prioritize projects, so the logical answer from our politicians is to throw more money at them. If that wasn’t bad enough, there are a number of residents who think that by overriding the governor’s veto the Legislature showed democratic leadership in doing the right thing. How is throwing more money at a mismanaged department showing leadership?

If I had to define democratic leadership, I would say it’s having the courage to face a department like MnDOT and its associated unions and tell them that before approaching the taxpayers for more money, they must become better managed, develop effective internal controls and learn the art of prioritizing.

Our politicians took the easy way out. I hope that there are enough voters like me who will show them how easy it is to show them the way out.

Terry L. Roepke, St. Paul

Do we want money to go to a broken department?  No, but there was an attempt to hold this department accountable, and that was through giving Molnau the boot from the top spot.  The acting and new Commissioner, whoever that might be, will need to be held to a higher standard.  Regardless, the money is needed.

As I said at the beginning, I will be posting more blogs on issues related to all of this in the coming week.

-Josh

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