Lawmakers look toward gas tax to make up for lost transportation funds

ST. PAUL (AP) -- The popular decision to cut license-tab fees two years ago is contributing to not-so-popular talk of raising the gas tax.

"Generally, people appreciated having lower tab fees. The downside is that it took $170 million (a year) out of the highway construction fund," said Sen. Dean Johnson, DFL-Willmar. "It's kind of like we had a great time Saturday night and we woke up and had to pay for it."

If gas taxes are raised, those who drive the most, or burn the most fuel, would pay the most. The move also would shift the user-tax burden.

As Sen. Doug Johnson, DFL-Tower, put it: "If you are a middle-or low-income employee who drives 50 miles to work, you are paying the same tax as a millionaire driving 50 miles to work."

Tab fees, like the gas tax, go into a trust fund for roads and bridges. Gov. Jesse Ventura lowered the fees when the state was flush and compensated for the lost highway revenue with money from the general fund.

But the economy has slowed, and the drop in tab revenues comes at the same time public pressure for road and transit improvements has grown.

The combination of events is leading both the House and Senate to propose gas-tax increases from 3.5 to 7 cents a gallon. The current tax is 20 cents.

Ventura delivered the tab reductions single-handedly in 2000 as part of the three-way deal that allowed the governor, House and Senate each to decide how to spend a third of the state surplus. House Republicans devoted most of their third to permanent tax cuts. Senate DFLers used most of theirs for education, environmental projects and health care.

At the time, Ventura said he was correcting a bad tax. The thinking was that all vehicles use the road the same way regardless of their value, said Jenny Eng, assistant commissioner of revenue.

Senate DFL leaders now consider the cuts extreme. They propose to raise fees somewhat by slowing down the depreciation schedule to which they're tied.