During the 2015 Minnesota Legislative Session, the Minnesota Senate and the Minnesota House of Representatives were unable to resolve differences in sources and methods of acquiring funding for transportation legislation. This left the state without a comprehensive outcome. The bill coming from the Minnesota Senate sought adoption of a 6.5 percent gross receipts tax on fuel, assessed at the wholesale level. The Minnesota House bill worked to use available funding and redirection of already existing taxes. During the conference committee process, the differences were not able to be worked out.
Farm Bureau does not support the approach of a gross receipts tax on fuel because of the manner in which this creates an indexed tax system, which drives gas taxes higher as fuel prices increase. Farm Bureau policy supports that the primary source of transportation funding should come from the fuel tax and Motor Vehicle Sales Tax (MVST), but does support the use of other funding sources and tax types. This policy also supports the use of bonding and direction of general funds to transportation needs.
Farm Bureau policy identifies the need for special attention to be given to help with upgrades of county and township roads and bridges.
What we need is transportation legislation which addresses funding needs for local roads and bridges.
Overall the legislative approach for transportation funding in the upcoming session should avoid pursuing a gross receipts fuel tax and work to build a package with the existing foundation of funding along with a combination of bonding. Consideration to redirecting sales taxes on vehicle repair parts and similar related sources should be included with the use of general funds.
Ideas are being discussed to use local sales tax options for projects like urban transit projects. Farm Bureau policy supports the ability for local units of government to pursue a local sales tax option with a referendum to gain voter support. We also oppose the use of gas taxes being used for bike paths and light rail projects.