Gov. Tim Walz (D-MN) was forced to reexamine his budget proposal “line by line” after the state’s budget forecast came up $492 million short of November’s estimated $1.5 billion surplus. But his recently released revised budget recommendations still include a 20-cent gas-tax hike.
“The governor recommends the state commit to a major transportation investment plan to fund the estimated $6 billion gap that exists between funding needs and available revenues over the next 10 years. The governor proposes filling the $6 billion gap in road and bridge funding by initiating a 20 cent gas tax increase, including fuel in distributor storage at the start time of each increase,” the budget recommendations state.
Walz is also calling for increasing the registration tax from 1.25 percent to 1.5 percent and increasing the motor vehicle sales tax from 6.5 percent to 6.875 percent.
“This is not a choice between whether we want the gas tax or not. It’s a choice between living in a state with the best transportation system in the country or one with crumbling roads and bridges,” Walz said in February when unveiling his initial budget proposal.
Overall, Walz’s budget proposal would raise spending by more than $3 billion, increasing from roughly $45.5 billion to $49.5 billion. His budget proposal would increase the state’s gas tax from 28.6 cents per gallon to 48.6 cents—a 70 percent increase.
Center of the American Experiment economist John Phelan points out that this means Minnesota’s gas tax would “rise from 28th nationally to 4th.”
“This second budget proposal does almost nothing to remedy the problems in the first one. Minnesotans are some of the most heavily taxed citizens in America,” Phelan said. “At a time when the state government has never had it so good in terms of revenue, it is incomprehensible that they should be forced to pay out even more for new schemes and core functions of the state, such as roads.”
Minnesota House and Senate Republicans are adamantly opposed to the gas-tax increase, and have said they will release a budget proposal “that uses the $1 billion surplus to take care of our priorities without raising taxes.”
“Today House Democrats joined the Walz/Flanagan administration in a contest to see who could tax and spend the most and unfortunately, Minnesota families and taxpayers will be the ultimate losers,” Senate Majority Leader Paul Gazelka (R-Nisswa) said in a statement after House Democrats released a set of budget targets Monday. “They’re both spending more than we can afford at a pace that is simply unsustainable.”
“Minnesota has a $1 billion surplus and hundreds of millions in fraud in our public welfare programs, but House Democrats’ answer is always the same: raise taxes, take more money and make life more expensive for every family in Minnesota,” House Minority Leader Kurt Daudt (R-Crown) said.
Daudt said it was “disappointing” that Walz has not “backed off the most harmful elements of his budget—a billion dollar tax increase on Minnesotans’ health care, and a crippling 70 percent gas tax hike.”
“The governor should focus on helping Minnesotans keep more of their hard-earned money, and work to fund basic priorities like roads and bridges with our budget surplus, rather than making health care more expensive and driving up the cost of everyday goods for all Minnesotans,” he added.
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