Transportation Fact Check No. 1:It was said that the newly enacted transportation bill will give Minnesota the seventh highest gas tax in the country. It's not so.
Minnesota's current 20-cent tax ranks 30th among the states as of January 2008, according to the American Petroleum Institute. When it goes to 22 cents on April 1, assuming no other state's rate changes, it will be tied for 25th. When the next 3.5-cent increase is fully added in October, again assuming no other state makes an adjustment, Minnesota's will rank 20th.
The remaining 3.5 cent per gallon tax increase for debt service authorized by the new bill won't be fully phased in until 2013. By then, the nine states whose gas tax rate rises automatically with inflation will almost certainly pay more than they do now. But even if those states freeze their rates at 2008 levels, Minnesota's 2013 rate will be less than the rate paid in 12 other states now.
Transportation Fact Check No. 2:The $6.6 billion, 10-year bill was said to impose the biggest tax increase in state history. It isn't close, when one considers the impact of inflation.
The tax-increase champ remains the Minnesota Miracle income and sales tax increase of 1971 -- $580 million over two years on a base general fund budget of $2 billion. The Miracle also reduced local taxes, creating a net tax increase of about 16 percent of total state and local taxes. By comparison, the transportation bill that became law Monday will increase state and local taxes by less than 2 percent in the coming two-year biennium.
Another perspective comes from state Senate fiscal analyst Matt Massman: Fee increases made since Tim Pawlenty became governor will result in the collection in this fiscal year of $550 million statewide, or about as much as the transportation bill will raise per year.
